non-violent and if of course they're not non-violent what are we talking about when we say the group is non-violent and that is the first i would like to get across. >> thank you time. that is a first-time ftd has been compared to the global muslim brotherhood. [laughter] >> i do it all the time. >> i'm going to focus very briefly on what i think egypt will look like if the muslim brotherhood does well. and my good friend e. brahimi often says he thinks the brotherhood in an election will probably win no more than 15%. i don't know if he has changed this usage going back to egypt. i think it is likely, i would be surprised if the brotherhood won less than 25% and i would not be astonished if it were to win as much as a 40%.

and then you have to say well, what will egypt look like? the one thing i think you can say is that with the brotherhood is not going to be is it is not going to be the islamic salvation front and algeria. now we don't know a lot of what the islamic salvation front was going to be in algeria because the military aborted the entire democratic process once it became clear that the islamic front was going to do fairly well. but the one thing we do know is there were prominent members of the islamic salvation front who actually openly were in favor of using democracy to essentially abort democracy. one of the two most prominent members was pretty explicit and his disgust to say for democracy and everything that democracy brings he said it's very clearly that democracy and the holy law cannot cohabit. now this is not the case in

egypt. in fact it is quite astonishing to see the extent to which the brotherhood has sorted default from that simple formulaic of ali -- i think the situation will be a hell of a lot more competition. that is not to say it is going to in any way, shape or form escape what i call the holy trinity of democratic expansion in the muslim world which is anti-semitism, anti-americanism and anti-zionism. wherever you see democracy grow mocks muslims you are going to see those three forces gain speed. that is i think an inevitable part of this process so i think you'll certainly see that in egypt if the muslim brotherhood does reasonably well well enough to become a big factor in egyptian politics. now what that means practically is certainly the brotherhood will make a play because this is where they, all fundamentalists view this as core mores of

society. they're going to make a play for personal status law. they will try to ensure that personal status law in egypt is essentially sharia bound. now, actually in many ways that won't be that great of a change in egypt since sharia law in most places is already the dominant law for all personal status. so we are not -- for a lot of folks that is not going to be a big change assuming they can get it past. i don't know if they can get through an egyptian parliament. it all depends upon the numbers they get and the pushback that they have. obviously this will be a significant change for minorities because i suspect the brotherhood because it is a modern organization will not revert to a traditional view of these things are all personal status for cops to be governed by the church.

i think it is sufficiently nationally experienced to say it will apply turbine including minorities. i think it is highly likely that the muslim brotherhood will push very hard for a renewal of the treaty within israel. this will get very complicated of course with the military, since the military in egypt is in great part -- and they make a lot of money from that peace treaty and they make a lot of money from bright star military exercises in egypt and they don't want to see that money go away from them or their family members. so you were going to have quite the attention however i think it is highly likely the brotherhood will push for a revision of that treaty nullification of the treaty because it is simply anathema to them and it will be interesting to see where that

goes. i suspect the brotherhood will actually have not an insignificant level of support from secular parties in egypt, so it is possible that you will see that treaty nullified but again, it is going to be one hell of a ride because the military is going to i suspect pushback quite hard on that or see if there is some way they can arrange a deal with the united states that the treaty is nullified and they still get their money. so we will have to see where that goes, but i am sure they are going to go in that direction. i would expect the brotherhood to go after alcohol. muslim parties always do. i would expect them to go after the life in egypt's little resort and many resorts and in his private clubs, which if you haven't gone to them are really quite something.

i don't know what progress they are going to make there. that is an interesting question and in turkey for example erdogan went after alcohol. he was beaten back and he was defeated, at least in istanbul where of course everyone is devoted to forms of alcoholic entertainment. their success elsewhere in turkey in the provinces has been greater but then again it must be said that in the provinces the prevalence of alcohol always there has always been less than places like istanbul and its mayor. so i think you are going to have a big push there. you will see the brotherhood without a shadow of a doubt try to go after the united states whenever possible. i think you will see them also

whenever possible, to go after israel to demonize israel. i would suggest to you there that that is their position, it is not all that different from the position you currently have in egypt. you have got to remember that all things in life are evolutionary and that the views of the brotherhood has towards egypt actually -- towards israel aren't that different from any of the views you find easily expressed amongst secular elites which can be quite vicious, quite nasty and anti-semitic towards israel. you can definitely be absolutely certain that hamas and gaza are going to become big issues inside of any egyptian parliament. this will go hand-in-hand with the discussion of whether the treaty should be nullified. i do not know how that is going to go. it is going to be one of those great debate moments inside of

each of. all i can say and i've said this many times, and i think it is a valid point that if the treaty survives, in egyptian parliament where the brotherhood and members of the secular elites are adamantly opposed to that treaty, but the treaty nevertheless wins in an egyptian parliament in that treaty has real force. it has the type of force that it never had with a treaty signed only with a dictatorship. so we will have to see where that plays out. i am skeptical that the brotherhood is going to be able to maintain the same type of unity. i would agree with lorenzo. i think it will be very difficult for them to maintain the type of unity they were able to maintain under the brotherhood. this is not to say one wing of the brotherhood will break off

and turn into something that most of us could esteem. i sincerely doubt that, but i think the pressures inside of the brotherhood are quite real and i see no reason why if democracy, if the votes continue to hold a see no reason why the evolution of the brotherhood will not be similar to the evolution that we have seen elsewhere in the islamic world whether it be in iraq or i think most importantly and iran. parallels are interesting. iran is a special case because you actually have theocracy and i actually think the marriage of democracy in islam is going to create a much more complicated situation, so the secular profound secularization that you have seen in iranian society under dictatorship is probably going to be less in egypt that openly embraces democracy. the position of islam will actually be less threatened in

egypt bennett has been threatened inside of iran. you are likely to see a more vigorous defense of islamic values in egypt then you have seen and iran though i must caution that on the democratic side of the ledger in iran you have seen people of profound faith defend islam and democracy quite powerfully and summon like -- one of the great theologic the illusions of our time a real revolutionary figure i think has led the way for folks and people like an exiled in the united states which is probably the most eloquent clerical ida shows the power that can happen in fact in people of devout faith marry up with democracy and you start having astonishing -- where the holy love begins and democracy

begins and ends. these debates you will see in asia. there's there is no question about that and i would just suggest those are the debates we want to see years ago. we didn't see them 40 or 50 years ago because military autocracy cut the debates up. you stop having an organic development in the middle east because military secularizing military dictatorship stopped it they killed it dead and what we all hoped for was going to be the evolution of ben added turkish model and the arab world never developed. that is he didn't have the eventual evolution of an autocracy military dictatorship and the more liberal democratic society. turkey is not a liberal democratic society but -- progress which i don't think by the way despite his worst efforts is going to be a will to reverse. but the key here is that now you were going to have those debates. you were going to have real

debate between people of devout faith, between islam is with extremely repugnant views between liberal democrats. they are going to go at it and we will see who wins. that is as i said, it is not clear but i would argue that that process is not only unavoidable but it is essential if we hope for these societies to actually one day become more liberal. >> thank you very much for three very interesting presentations this morning. i actually have a technical question to begin with here that i'm hoping one or maybe all of you can answer. we know that the brotherhood right right now in egypt is creating what they call the freedom and justice party. what does that mean exactly for the brotherhood? obviously we know the brotherhood is based out of egypt and now they are creating a party that looks like a lot of

the other parties that exist around the region whether it is the islamic action front. are we going to see fissures between the broader brotherhood movement and this party? will there be a firewall? can you provide any color to that? >> that is a very difficult question because we don't know cusack and we didn't get a straight answer about the information of the party from the brotherhood at the very beginning. no we are not interested, yes we are interested in as we are filing and again doublespeak could be partially because of doublespeak just because different answer to a different audience. it could be because there is no one voice of the brotherhood. we don't know cusack we who calls the shots and they themselves don't know exactly who calls the shots. it is often said the people we see in the brotherhood are not necessarily the people who actually have power so somebody is not the most important person in the brotherhood.

i think also there is a large cross-section of the brotherhood that has not been interested in politics. but more and dawa grassroots activity. you see that dynamic in egypt and many other countries including in the west where you see parts of the brotherhood that is deeply political and wants to be engaged in the political process whether to hijack it or not can be debated that others would simply say that the brotherhood should we like al-banna in the very beginning, something that focuses on providing islamic knowledge and politics is something that they brotherhood should concern itself with and i think you have a lot of people who are the people that built the support for the brotherhood in one way but that are not that interested in politics. >> can i comment on that?

all i would say is that movement which the french nicely labeled neal fundamentalism, it began because they really didn't have an alternative. you got out of politics because politics, you ended up in jail and you were tortured or you died. so neal fundamentalism which aims at a society of change in society, changing mores was an outgrowth of dictatorship. we don't know whether it will continue to put -- focus on that when you do have a political option where you can express your mores politically because you know islam does have advantage in that, was to say they have greater clarity on the issue and what you believe your mores should have clinical overtones. we in the west have sorted defaults beyond that where we hold our deepest values to not

necessarily have any political relevance. >> is interesting because we are interested on the point on the no other options. the key point here which i think is missed is that a lot of a west discussions of brotherhood treats al-banna as a distinct entity until he later led the organization and is widely known to be the intellectual forefather of al qaeda. if you study al-banna carefully you realize he was not in non-violent dawa. he set up a secret apparatus for violence in egypt that a red -- led to one of the islamic terrorist camps there. basically the thing that was distinctive about al-banna with the pressure of egyptian government on his shoulders was he was a cagey decision-maker a tactician who could switch gears quickly to figure out what was going to work and what wasn't going to work.

you see that throughout the world. one of his senior intel officials who testified before congress said the brotherhood has adapted all these different tactics in every different country and alluded to this as well and see it as a point in their favor that somehow they were people of moderation but that is not really what they have done. they basically adjusted themselves to the reality on the ground up what is going on for they can use violence and hamas and gaza they use it. to answer your original question which was a political party in egypt and whether or not the brotherhood has become the party and what that will meet. i will give you a quick comparison of the two brotherhood political parties. we have seen some tensions between old and new guard in terms of the election process for secretary general of the group. there the old guard has as far as i can tell basically one for the time being. mainly because of the success of hamas and the thing there is when you have the hard-liners

within the muslim brotherhood who have seen the success of hamas in terms of establishing itself as a political entity and a reality in gaza and they fought if any challenges from inside that would basically modify their approach. so there is one case study where you can see that there is the capacity for these decisions -- mike fissures within a political party and the muslim brotherhood. the second is that i will give you go is the islam party in yemen which is led by sheikh sin donahue is a designated al qaeda backer. he is a guy who's known in the treasury department as a longtime spiritual adviser for osama bin laden. is recruited jihadist to go to al qaeda training camps. is a guy who disapproves to my mind the idea that there are somehow this vast gap between the brotherhood and al qaeda. when you see it character like this. the islam party has not been

subjected to the rigors of the democratic debate because of the way the pluto go government has acted and you have not seen as much of the tensions between different factions in the party. i don't think that the brotherhood in egypt is necessarily going to go that way. there is potential for a lot more disagreement in terms of basically working out how they are going to position themselves. in the long run though i don't see any other dense yet that the new guard is going to be the old guard since in jordan the old guard one out. >> just one thing on the brotherhood in egypt. i tend, graywith lorenzo that i don't believe this is a comintern. don't think the organization really does work that way. i think the local economy of brotherhood groups is really at times quite profound. that is not to say there is not a universal fraternity. i think there is.

i strongly suspect whatever happens with the brotherhood it will have profound impact on the brotherhood abroad. there was a few at one time garza held by frenchman that the western experience of muslims which feed back into the middle east and fundamentally change the middle east. now, there is some evidence for intellectual ideas moving from the west going back to the native countries and having some influence. that is certainly true and iran. it is less true i would argue in the air for old though it is still true but i think the real intellectual generator is back in the middle east, so whichever way the brotherhood goes however it evolves, i would expect it to have serious ramifications on the brotherhood elsewhere.

so, if the brotherhood is actually corralled by the democratic system, then i would expect that impact to be fairly significant locally. >> reuel hit on it point which is a discussion of what the brotherhood is as a international today. is an international -- i take take it be somewhere in between. it is not a top-down organization where the general guide in egypt directs all the parties and they do what he says however you can't dismiss it as a purely sort of movement in inward along and sort of a only have a common interest and sort of a club so to speak. you can see that in a number of the ways. you can see that with the flotilla that approach gaza back in 2010. if you study the roster the characters on the flotilla you can see brothers from all these different branches of the brotherhood from jordan and egypt and britain they came together for this event in a

highly coordinated fashion. that suggests he may a greater degree of coordination between these entities and sort of a social club or movement. the second thing is you could see it and make the finance the organization internationally where they channeled money to hamas. is amazing to watch everything from the u.s. across the u.s. in the middle east where these organizations are capable of putting their money in the same coffer and they have and to know exactly how to get their money to hamas to fund these organizations. that is something that is come out of the trials we can see organizations set up deliberately with the help of organizations internationally in egypt and elsewhere to raise money for hamas. so i kind of come out in between the two. i don't think you can argue that based on what we know that it is a hierarchical organization. i don't think that is the way it works but by the same token you can't say it is a movement that is loosely affiliated. it is something in between which is basically how a lot of organizations are modeled. >> i think it is interesting

that this conversation is propelling itself and we don't need to ask too many questions to prompt a good lively conversation here. i want to ask one other question though. i think i sense a little bit of difference between you lorenzo and you tom. we haven't talked about the muslim brotherhood here in the west. there has been a lot of talk recently in the media here. can you tell me very quickly how each of you view its operations here in the west and what thinks it has in the middle east and more broadly the change we are witnessing right now across the middle east? how does that impact the brotherhood in the west right now? >> it is fair to say pretty much in every western country we have organizations that the pattern has been a student organization created by a handful of experienced brotherhood individuals who left egypt for

syria or other countries to escape persecution and a larger number of enthusiastic students. in the 40s, 50s, 60s and 70s that evolved into very large organizations nowadays. very large, very vocal and very visible and very prominent because they are often located whether washington or paris. at the end of the day we are a very small membership of a few thousand people at most in most countries. they all sort of contract and again it is the dichotomy of whether it is an organization or not. there is kind of an umbrella structure for exempla in europe, which is based in brussels not coincidently two blocks from the european commission. and they do interact all the time.

they do coordinate their activities all the time. nevertheless in each country, each organization organization acts independently, free to choose its tactics, free to choose whatever the goals are in and it is not uncommon to see in some cases you have this division globally and in the west. the gulf war was the first one in 1981, a major event that really divided the brotherhood. you have some branches of the brotherhood on one side and others on the other and of bernard on this -- site in lost funding so you do have those divisions. when it comes to the links to the middle east i think it is very difficult -- i'm fully aware that we have only scratched the surface and it would the naïve and arrogant of me or anybody else to claim to know the full picture. i think some links to exist and it was very interesting when i was writing the book and doing

interviews with the brotherhood in the west telling me there were no links with or to egypt and people in the shura council and egypt, the brotherhood in germany was here last week so it is different. we are only scratching the service nevertheless according to -- cairo being new moscow calling the shots and telling people in norway or canada how to carry on. there is a lot of independents with what the brotherhood france is completely different from what the brotherhood does in u.k.. look at how they act on the -- uif is very quiet about it in france. so the dynamics are very different. there's a common intellectual heritage and methodology that comes from the middle east but the brotherhood in the west has been able to adapt it in the west.

there is a definite generational change taking place. we have people born in the west that are taking a lead in these organizations. our big difference, are they just better versed in talking a better game? difficult to say. would argue some organizations are going away from the brotherhood ideology to some degree. and others are not, not at all. when it comes also to at least the one point that brings them all together and this is where i agree with thomas isn't support for hamas. that is the one issue on which they do not compromise and it is the one issue that it caused them a lot of problems because the one issue where they have been publicly supporting violent action and that is caused them a lot of pr headaches and that is the one issue in which they do not compromise in raising funds

and that is caustic and a lot of legal problems. the holy land case in the united states been united states been the most prominent example. that is where you see the more sophisticated kind of interaction. >> two things. reuel you mentioned in egypt there were three things you didn't think the brotherhood was going to get away from is anti-semitic anti-americanism. those are obviously the basic commonalities in all all the brotherhood branches but this is where i take a dimmer view than lorenzo on this issue in terms of engaging the brotherhood in the west. one of the characters who has been prominently talked about in this whole controversy surrounding him is ramadan who is the grandson of hasan al-banna. he investigates them carefully and he is the guy who firmly sets in the west, the guide who

operates in the west and this is where i see a lot of what they say in the brotherhood ran ranches they have tactical decisions not something firmly rooted in their ideology and i want to read, i hated when people do this but i had to do it because paul berman said this better than i ever could. is an exhaustive study and afterwards he talks about commies is what is ramadan palm palm --'s final message and messages in four parts. the first is ramadan condemning terrorism. the third step is he understands terrorism so tenderly he ends up justifying it. the four step is he justifies it so thoroughly that he ends up defending it. that is exactly what i think you are dealing with. he is a fist up which is he says who are you to question about terrorism anyway? so i think that is a big part of the problem i see in a lot of

the intellectual debate when you talk about these groups and what difference is they have between them how much of it is rhetoric for the time medication versus what is real ideological differences? biella suggest that i've debated from a don and i would suggest he could not have gotten to the point described by mr. berman in the book without growing up in europe. it is beyond a shadow of a doubt the man was not nearly be as personally vain or as warring if he had not spent so many years in switzerland. so, he would be vastly more interesting man and he would be probably be happier if he had actually spent more time in egypt. >> let me add one final thought. basically the way i see this all his criteria for these branches of brotherhood is a simple question which i address in my opening which is what is your stance on suicide bombings? you can't walk back from suicide bombings and announce them, then

my guess is you probably are not a moderate islamic. i think it is something quite different from that. >> i am happy to have lorenzo and tom -- reuel you said we will have debates and you implied early stanford that this debate should be productive when they are actually given the necessity to defend positions on the argue back and forth but isn't it equally possible that the form the debates will take is not people sitting on a panel civilly disputing one another's ideas or writing op-eds or going on tv and radio but rather the debate to take for example in russia which has parliamentary procedures and voting or iran of course which is parliamentary procedures and voting or increasingly lebanon which has a history of parliamentary procedures and voting but in each of these cases the parameters of the debate are

limited by assassinations. you can think of a good op-ed, you kill your enemy and that shuts them up pretty effectively. >> i mean that as a possibility. the only problem that we assume the worse for the brotherhood. the only problem with that is it is going to have to get by the egyptian military, so if it is going to take a policy of assassination, and i doubt it is going to go that way, because i think it would be nipped in the bud and a longer-term aspiration but if her were to go that way it would more or less have to be complicit with the military if the military is complicit in that then we are probably all coked anyway. i would expect there to be real debate. that debate is probably going to largely be screaming. i mean if we witness debate in the middle east, it tends to be on a volume and a range, which

is significantly different than in the west. so, but i think that debate is nevertheless real. and i would expect those in egypt who like their a call, the women in egypt who like certain social rights, the businessman in egypt who like all the western tourism and the military men who like all the goodies to vigorously defend their positions in an egyptian way, and i think the brotherhood is not going to have an easy time railroading this through. with that said you know, if they do well, at the ballot box, they will be in a position to democratically see more of their agenda implemented. >> you keep talking about

egyptian alcohol. i personally would like to ban egyptian beer. is rather terrible. >> actually i think it has gotten better because they actually have a deal with the turks and the turks came down to help them and actually i think the quality --. >> we are going to take a question from michael allen. >> thank you. two brief questions if i may. one on each of. some of the differences with turkey is in turkey the military was largely responsible for constraining and moderating the party and its predecessors. by contrast in egypt we have seen recently the egyptian military facilitating enhancements -- amendment committee and in the light of yesterday's results we seem to be saying the development of what some commentators have called mubarak is some.

seemingly intent on re-creating the kind of adversarial political system that says both of them to varying degrees quite well at the expense of a secular democratic middle. how do you explain the rationale or what is the rationale issue understanding of the military's attitudes in a recent decision and secondly we have heard nothing about tunisia hardly at all. as they understand its leader is currently being held up in the west is the most moderate the most democratic of us liberal of all the parties and even more than morocco. and tanisha we know they have a strong military as we have been morocco a monarch who is ahead of the faithful so none of those red lines the islamist party in tunisia so if you could throw a little light on that in tanisha.

>> tunisia concerns me less than egypt to be honest. not because of the military necessarily but because of society and i honestly think it is of course difficult to evaluate a society that wasn't free until a couple of months ago but i think the islamists have traditionally had only limited support. is tunisia going to be leverage some forces and participate in an election election and win some seats? probably come absolutely. will they be part of the system? probably but i don't see them making the kind of headway at the brotherhood in egypt would make where i agree with the assessment that the numbers we have talked about i really don't see that happening in tunisia. of course there are other parts of these that will be organized but it just doesn't have that he'll into niche in society. we talked about moderates and radicals get tunisia has been ousted in the west as -- a book

about that democrats. rashid talks about democracy but democracy was invented via muslims. but when you read and i agree with thomas what ghannouchi talks about in terms of citizenship he talks about qualified and unqualified citizenship. muslims have a qualified citizenship with an additional couple of burdens which is to pledge of allegiance to the state which muslims don't have to do. they are not entitled to the highest positions in government. so with all the talk about democracy, you read the footnotes and it is not necessarily bad but ghannouchi talking about the age tk as a model for the last few years. that is where you kind of see in a way this more moderate wing of

the brotherhood which is not exactly what we would be perfect lamel democrats but nevertheless ghannouchi and the second generation brotherhood is going be a cape p. way. >> ghannouchi i'm glad you raised because ghannouchi is a great example of the doublespeak and again you have to sort of a think as criteria for how you think judging these intellectuals and and and these ideologues and how they approach things and at the end of the day for ghannouchi what is he believing? does he believe in clerical rule or the sharia state were essentially these preordained clerics tell people i live their lives and is that consistent with any kind of former democracy and i would say in his view of the world no it is not so when we talk about democracy we are talking about something different. is basically how clerics are chosen within the organization and sort of how ruiz established. it is not true democracy opening up but on all these issues, i'm

interested to hear what reuel has to say about this but there's a tension between the idea that these are some sort of detente with the egyptian mobile terry and islamists and a power-sharing arrangement i think is perhaps and i'm curious to hear what reuel has to say that perhaps one of the big problems we face in not opening it up for the type of discourse that sub bases in the long-term opening up the middle east to rilla forms. >> just a quick word on that is interested may. he is a western muslim hybrid and i don't think he knows what he please. i think what a lot of these guys they're making it up as they go along and you have to have an extreme tolerance for withstanding the blatant contradictions of their thoughts. those contradictions will paralyze you. he can obviously tolerate the contradictions of vastly better than we can but still we will

see where he goes. i suspect, i'm not going to have a lot of work cut out. it is going to have a harder time. you can imagine he is interesting to listen to a unlike a lot of these guys and that is why he gets a lot of western attention because you can actually talk to him. on the egyptian military and the brotherhood, the primary reason is conservatism. as you said it is known that they like that relationship. i think the ndp is going to have to do a lot to survive. i think those folks are in deep doo doo. so they can't play to a liberal order. that is impossible. that oxygen is going to be sucked up elsewhere so the ndp has to go back to its traditional political game which includes the move -- move of

brotherhood. so it probably is looking forward to the muslim brotherhood doing better. but again as she said this is mubarakism. why were the liberal soap pounded by mubarak? because they took up his terrain. they took up the terrain as the western eyes elite. they appeal to us. it was much more -- they were in some sense much more threatening so i think this is simply more less a continuation of that. >> thank you. we are going to take a question on the left side. if you could state your name and affiliation please. >> thomas you mentioned iraq and how the brotherhood treats suicide bombings there. which sunni party would you say corresponds to the brotherhood?

what have they said regarding suicide bombings there? it strikes me as most suicide bombings are carried out by former al qaeda people with loose affiliation for al qaeda who are really folks seeking publicity and have almost no political role in the country. >> i agree with where you are coming from but what i'm talking about is the egyptian brotherhood, sort of justifies suicide bombings in iraq on their own theological grounds. on the west we talk about the terms of justifying only a defensive jihad. in other words some response to western aggression but if you study the data including what came out through wikileaks a series of declassified documents on the high casualty event you can see the suicide bombings are what drive a large numbers of muslim casually so there's a real tension and i agree with you in terms of on the ground in

iraq. i'm outside of iraq where the general guide of the muslim brotherhood in egypt is bombings. they like to portray it as some clear-cut sort of tactic to use against western aggression but i would say a lot of times it leads to civilians being killed much more than anything else. >> is it still happening even at the stage where the al qaeda people in iraq have no following whatsoever except for their own? secondly and i may have missed this because i came a little bit late but we had a story from a reporter in cairo about the division in the brotherhood by generations and the younger generation truly is splitting with living with their grandparents and their parents and have a much broader outlook. >> do you find that as well? >> well again, i think lorenzo

alluded to this earlier. i don't see see there are divisions in the brotherhood in the various branches and within the brotherhood in egypt. i agree there are different parties. what i always say is who wields the power? these younger brothers who do have a more sort of i would say comparatively speaking moderate viewpoint than the old guard if they were to take power and assert authority, you would see difference in the way they approach things but as lorenzo said i don't think we have seen the old guard in terms of the imagination of power there. is still it still going on in iraq? i think the brotherhood's rhetoric internationally from egypt has toned down in iraq because of the security situation there. what i was referring who are mostly statements really from i would say the post-2003 through 2008 meeting. certainly between 2003 and 2008 in 2000 on at camp uruza number of quotes justifying that

violence. >> just to congregate things, to show how complicated the brotherhood is thomas is perfectly right. you can -- make your whale put down the people within the brotherhood that sub port and still support suicide bombing. certainly a few weeks ago a supportive suicide law means. nevertheless what is the local option of the brotherhood participated in elections and all the al qaeda people in iraq, many tapes were issued condemning the brotherhood in iraq for participating in elections. one of the many acts of treachery of the brotherhood that in iraq the elections. so it is very complex and internally there has been criticism of the brotherhood, within what we referred to as the global muslim brotherhood.

criticism of the brotherhood in iraq were dissipating in elections but the defense of their position was listen we have to be pragmatic and what is best going to achieve our goals? not a random bombings that al qaeda is doing. then of course you have the rhetoric for public consumption and i'm sure their instincts which of course to use violence against invaders. no question that is the gut feeling. so it is very complex and always debated within the brotherhood and you never really know exact way where they are going to stand. >> i mean, it is obviously too soon to know but it would be interesting, to go to egypt and began to look at bookstores and familiarize visited by the brotherhood often. they are essentially brotherhood bookstores to see which books

are actually selling well, selling like hotcakes. again i don't know the answer to that and if you were to say go to iran today and you were to see whether -- was selling well or numerous works by the marxist islamist father of the revolution, i think you would discover that no one is reading them. they have evolved, they have gone. those books have no relevance whatsoever to the vast majority of people and if you go to najaf you go into the bookstores and you will see that come many's pamphlet to live by, they are all stacked up and no one buys them. the iranians brought them over as an exporter no one would even think of reading them. so, we will see what happens in egypt with the brotherhood and we will see what happens in their bookstores, to see who was

selling and who is not in that would he a good indicator of where the brotherhood really is now, to go and see what the book looks like. >> we have a question here in the back. .. so they say that was the

beginning of the participation of the brotherhood life and the goodbye to violence. the interesting thing is -- good story, but the books are still very much published in translated in all languages. you could find it in all bookstores and anywhere you go in cairo. the question everyone always asks, well, if this is the reputation, you are kind of embarrassed of and one to refuse, why not take the book, and you get weird looks when it . >> just quickly i haven't been to the bookstores in cairo but i can see from consuming a lot of online propaganda and messaging what concerns me is when you will get even entities in the u.s., a lot of the more radical ideologues still have a prominent presence on line in terms of what is presented in

the written form and also videos. that sort of what concerned me. and you can see the teachings on chehab and the military things are still prominent. you can see they have a relationship with pakistan who was a very strong affiliated muslim brotherhood intellectual. you can see this stuff on line easily and i can assure you one youtube in two seconds videos that are downloadable from the various brotherhood affiliate's. so in my mind, i don't know exactly what is in the bookstores in cairo but i know where they're pushing it everywhere else and it certainly doesn't have here to the non-violent message they like to say. >> yes. my name is gregg and i'm an independent consultant. my question is probably fourth lorenzo. the party was legalized a few weeks ago in egypt and of course former brotherhood members who long wanted legal representation of mubarak but never got it

recently they got it. they seem to be attracting some young doherty egyptians who had, you know, democratic but also leaning so i'm wondering what impact the organization will have on the fortune of the brotherhood as they go forward with the election process in egypt. >> it's a very good question. i wish i had a better answer. i fink with the problem is we don't know the resources these groups have. my feeling is the party doesn't have that many resources. the brotherhood has that the fast grassroots apparatus, and first it was about fissures within the brotherhood is the law of the bottom line as resources are controlled by those. even people in the third generation are very prominent second generation like [inaudible] who left pretty much the brotherhood and they are kind of trying to find their own niche,

but it's very complicated to see where and how they are going to be immobilized some support the resources beyond the perhaps small group of followers in cairo. it's part of the small committee of people who formed the apr foot movement, the revolutionary people. this may not be the young person. the gamal abdel, 50 something. but how is that movement going to translate into something like a viable political party at the polls in six months? that is i think problematic. that is why i still see the traditional brotherhood, which is the leadership under attack. last year the scheduled a protest by the younger people in front of the arab medical union where the brotherhood of leadership is. that's something unheard of where you have the young people

protest against the leadership. we never saw that in the past. the pacify internally, and a lot of this -- it's difficult to say how much of this is a radiological. there is no secret that one reason a lot of people in the brotherhood is to get a nice job. you go to medical school and get control of the union and guess who has a job for you when you graduate? if you are part of the brotherhood there's a good chance to get a job and if you're not, you don't get a job. a lot of people cheering for that reason. and one even in the movement -- the discontent might be personal issues by the ideological, but my point is the leadership is still very much in the tradition of the first and second brotherhood and it would be a great choice for people to move

away from them, not impossible, but in the short term if you break away, you're kind of on your own. unless you really strike an alliance with the islami force. it's kind of a brave new world out there. >> quickly, lorenzo brought up the old guard of the brotherhood in egypt. there is a good paper from the hudson institute in 2005 that talked about the new guard and highlighted challenging the old guard, and i asked this question all the time with the old guard is being supplanted or having a serious challenge, and in 2011 from the paper in 2005 and don't see any evidence that has made inroads to change -- >> [inaudible] >> exactly. >> didn't get elected. he got kicked out. >> a question from mark. >> no comment, but a brief question. we have heard a lot about we

shall see or as the french say [inaudible] -- but clearly we need policy. we clearly need some policy suggestions. what i would ask you perhaps the three decisionmakers, lorenzo, doherty decision maker at the e.u. commission and council and the senior director at the nsc had the privilege of being the decision maker within the prime minister's office in jerusalem. what should the europeans and americans and the israelis do in confronting what is a consequential change in the middle east, and particularly with respect to the muslim brotherhood? >> i will go first. [laughter] thanks for that question, mark. >> thank you very much. appreciate it. it is a policy to some degree. there is a good argument for sometimes just not being too proactive and having to wait and see approach. i think you would be a mistake.

i published two weeks ago and not hidden the "washington post" but i got criticized quite a lot for it. my point was trying not to make the brotherhood be this 10-foot giant, because my fear would be we are all thinking the brotherhood is going to take over, and we embrace it immediately fearful that if we don't, then we are going to be -- they aren't going to like us and we aren't going to find ourselves in a good position. i think that is -- and i see the temptation with its -- to stick to the e.u. i see that sentiment there and i think that it's all for two reasons. first they don't like us any we so it's not whether you increase the more not. it's their position they don't like us any way. second is as we discussed here i'm not so sure they're going to be dominating the political scene. it's going to be an important player but not dominating the political scene. so the week and see approach i think is the best one. you want to keep the channel of communication open. you want to perhaps play as much

as you can. i don't think we have much influence, the plea in this kind of internal fisher's you want to establish the communication for the second and third generation. but i would take the line where you don't increase it -- increase it as it is happening, and you don't necessarily go against them. i think at this point if we were to take either route i think it's fair to understand that there is room for very tiny engagement for the most part every single policy position the brotherhood has that comes to middle east policies at odds with the e.u. wants. nevertheless, once confronted with certain pragmatic choices we talked about with israel, sure, other people can talk about what they are going to do that. but once confronted with the military and the spending if they take certain positions they're going to see their aid cut off from the u.s. it might change their tone.

that's why i would wait and see by maintaining the dialogue. >> let's say one of the things that struck me about lorenzo's book was well done as he talked about the engagement of the western government with the brotherhood in terms of the frame i think he framed in the term the brotherhood organization and the west do not represent a majority of muslims. the very small organizations in terms of membership it's very well organized and they are very well motivated, where has the broad most muslims don't identify as far as we can tell with these organizations. when you go to engage in the organizations and talk to them as long as they're not violating any crimes you talk to a certain degree first and foremost you have to be cognizant of you are talking to and have a thorough study has paul did to say here's the line talking to. it's not -- in love with you see in the public discourse is to engage somebody and talk to them and whatever nice smiley face it on something that day is the

only store you take away. you have to have a much more complicated and rigorous picture of who it is you are dealing with. but the second thing is that in terms of their ideology and their long-term goals, i think it's a very big mistake for the western government and anybody in the middle east to believe there's a sharp break between the brotherhood's audiology and the jihadists groups where again i keep coming back to the question what is your stance on the suicide bombing as part of the martyrdom that we face today. and if these intellectuals and public, you know, brotherhood leaders don't wholeheartedly disavow that, then you have to be careful in terms of how you engage and talk to them. >> actually, i think the israelis probably have the easiest position here because one, they shouldn't plan for dictatorship. they should increase the space transition in the middle east. they should remain deeply skeptical and suspicious and

maintain a robust defense budget and they should realize in the short term they are screwed. >> that was uplifting. [laughter] >> we are beginning to run out of time, so what i suggest we do is i think we have a question from [inaudible] we have one from sebastian and one from michael. we will do is take your questions at once and try to wrap it up and try to end an ounce on time as possible. so let's start with what might and pass the microphone on very quickly and make sure everybody gets their final questions. >> [inaudible] with all respect for the speakers and the audience, i have one question, why i am invited here? >> would you prefer not to be?

>> no, but do you know me? >> phyllis your affiliation and point of view in a few seconds. >> my name is ahmed. i have 25 years expertise and muslim brotherhood [inaudible] did you know they have their own university? >> i do. >> okay. so why you invited me here? just to listen to these gentlemen? >> would you like to ask a question? >> you are invited because we invite a lot folks here. >> in my respect, you are playing in my backyard. >> okay. we are going to pass the microphone, please. you're all in our invited to take part in the discussion and the was the hope for today. >> thank you.

sebastian affairs. like to take the question to the next iteration. if lorenzo is correct that the old guard still dominates the muslim brotherhood and if thomas is correct that the old guard is still unprepared to renounce violence and suicide bombing, then what is the u.s. start towards the victorious muslim brotherhood election in europe? if they do not denounce violence? and just a comment, the analogy to the comment on the brotherhood that doesn't mean it's not dangerous. al qaeda isn't the common term so just because it isn't a common term doesn't mean we shouldn't be very concerned about it. >> well that was a perfect suggestion. because i wanted to comment on the common term.

[laughter] as if the comintern was merged or something. out of a james bond movie. please remember all these communist parties before they came were perfectly flexible and social democrat and have all kind of great things to say about democracy, freedom and so forth. it's getting a bad name as the generation is dying off and so forth. secondly, fissures within the totalitarian movement and even regimes are commonplace. happens all the time. they killed them because they were so intense. in the case of italian fascism, he figured out early on that young happy fascists who want to believe in the revolution and so

forth were for the communist party, and he instructed people in the communist party to recruit them, and they did recruit them, and a significant element in the post war italian communists consisted of at the time young fascists, ideological conscious and idealistic fascists who then converted to the other extreme. i mean, one must keep these various things in mind. when we talk about mass movements and totalitarian movements. and finally, the policy question. the policy question is very awkward for everybody to talk about because we've screwed it up for so long. the policy questions to support democrats and to support space revolutions. we have not done that. no country in the western world has done that, certainly israel hasn't done that, and so here we are. and now -- and that's what happens when you have a rotten policy for a very long time, that is to get yourself into the

crises to which there is no good solution. we don't have good solution's right now. so i think we have to go back to the basics. but for god's sake, don't forget the history of the totalitarians , because it is a field history but it is important. >> final comment, gentlemen? >> just one thing on michael's and i agree on supporting democracy and i think the united states should also be forthright in saying what it stands for and it should have no illusion that by embracing the muslim brotherhood that you're going to moderate the muslim brotherhood. i will just say on evolution on michael's point, hosni mubarak launched 83 years ago. the soviet union is going enterprise lasted 72 years.

there is what is being launched by the muslim brotherhood is not young. this is not a youthful radiology. it is an old ideologies. that doesn't mean it can't be vigorous. as michael was living proof, you can be of a certain age and still be vigorous. [laughter] but it does mean perhaps you are not at your prime. [laughter] so i would just suggest we are not dealing with something that is i would argue useful growth mode. i suspect the brotherhood right now is trying to hold onto what it's got to see if i can make progress. but i think we need to be -- we need to be careful about freezing the organizations from 83 years ago or even 50 years ago.

>> i would just say - go michael highlighted in terms of the lack of policy, there's absolutely no strategic thinking in terms of the greater world. sebastian made the point a number of times as well and i agree there is no strategic thinking in the u.s. government on these issues at all, so there is no way -- within the various quarters of any given administration it varies between the different administrations. there is no consistent approach to these matters. so that's why we think highlighting policy problems is important because, you know, looking at this perspective if i were a policymaker today, you have to go back to basics. you have to start square one. it's important to establish the fact of who you're dealing with in terms of understanding who we were dealing with, with the believe, with the don't believe, how the characters a lot of times are able to use words to sort of defect criticism but then say something different to different audience, so the dynamic of where we see -- lorenzo vandiver talking about this before the panel -- you can

see the difference between the muslim brotherhood english-speaking and arabic speaking website. these types of analyses i don't see any evidence any of this is being done in the u.s. government at all. with any rigorous degree. and i will see any evidence that there is any real understanding of this in the duplicity involved in understanding the characters and when you're dealing with, so that makes the policy formulation difficult. >> fighting it's the same way. before you do policy, you've got to know what you're doing policy on or about. and i can we are still at the level, though we don't know. during the research on my book, it was fascinating to see the lack of understanding of the entities here in the u.s. or europe how most governments don't understand the dynamics and the ideology behind the organizations. and because of the doublespeak and the hybrid political religious nature of the organizations which makes all of us on comfortable because

inevitably you have to talk about religious issues. we are still at the level we don't have knowledge of the organizations and they're in theology. nevertheless, i think that we don't have the time to just sit back and establish the knowledge. we can do the policy on the go which is a scary thing to define understand not the first time in history we have to do that. and i think a policy of very cautious and huge debt and you were referring to my book what i talk about the policy of western options of the brotherhood isasi engagement without empowerment which is a very fine line. you cannot avoid talking to them. they do represent an important cross section in the west or political spectrum in egypt and other countries. but you do support the others

that are genuinely pro-democracy. so that the engagement shouldn't transcended into empowerment, and that is life year to some degree it's happening where we are all kind of running around scared the brotherhood, the brotherhood and then we decide we have to make nice with them and that is the engagement. and in power met. so, building the knowledge base and having a smart engagement with where you can find room for very small, very limited issues on which you can find a tactical partnerships, though we are talking about iraq. that is the situation where some kind of positive outcome came by working with the brotherhood. beyond that, it's very problematic. no question about it and as i sit on every big policy issue in the middle east, the brotherhood issue is at odds with what the

u.s. is but the reality. >> this is a question we are going to continue to wrestle with in washington and certainly here at fdd. on behalf of the defense a lot to think you all for coming and think c-span for coming out today and i would like to thank our panelists for coming. again i would encourage all to go and find the book god, man and about box and the book the muslim brotherhood in the west and also look for tom auslin's forthcoming book or monograph on the muslim brotherhood coming out at fdd. again i want to thank you for attending this briefing and please, check back to learn more about the briefings we will be having as the issue progresses. thank you. [applause]

[inaudible conversations] >> congress is out this week, but canada's parliament is in session. coming out this afternoon, the minister of finance will present to the countries budget report. we will have live coverage at 4:00 p.m. eastern. at 8:00, abc news anchor diane sawyer on the future of a

journalism. she will be interviewed by marvin kalb at the national press club. that is live at 8:00 p.m. eastern, also on c-span. >> tonight on a c-span2, a discussion of the history of the senate rules and procedures. you will hear from trent lott, senate historian richard baker, and "the wall street journal" capitol hill reporter janet hook. >> i kept trying to figure out, what are the rules here? for don't make any sense finally, i went to the parliamentarian of the senate and said, "i don't get eight. what are the rules in the senate was a " he said, there are only two rules in the senate -- exhaustion and unanimous consent. if you get senators exhausted enough, they will unanimously

agree to anything. i said, "i've got it." >> watch tonight at 8:00 p.m. eastern on the c-span2. >> government officials and internet company exhibit of last week endorsed online consumer privacy legislation. it would include a so-called "do not track" provision which would keep users from keeping their activities tracked by companies. this is two hours.

>> i will go ahead and call this order. i want to thank everyone for being here. first, i want to thank the commerce committee staff for holding -- for pulling this hearing together. we told an excellent panel, two panels, of witnesses. one thing it senator kerry and i were talking about is that the senate is supposed to vote at 10:30, and based on senate time, we don't know if that is 10:30, 10:45, 11:00, whenever. at some point we will have to swap the gavel back and forth. we will try to keep the hearing going during that time. also, i know that senator kerrey

has been a leader on this type of legislation, looking at privacy concerns, and has been working on a bill. we would like to hear from him in just a few moments on that. what i thought i would do is give just a very brief statement. i know that senator hutchison is on the way, and other senators are on the way. we might dispense with the opening statements for all the senators, if that's ok, except i thought i might call on senator kerrey for just a few minutes to talk about this legislation and go on to the panel. once senator hutchison shows up, we will recognize her opening statement. as we start today, i want to welcome everybody to the commerce committee's hearing on the state of online consumer privacy. this is a challenging endeavor. we want to balance the free internet, the ability to access a free content and services for all users, with concerns that

are raised about users' privacy and information collection practices online. consumers can conduct research and reid, newspapers, they can write e-mail address onto each other in real time. some of them are worried about how their information is collected on-line. some may be willing to surrender information in exchange 43 contact. others don't have any idea that is going on. as many good things as we can say about the internet, and how it is really -- it has really revolutionize information and has been so great in some many ways, privacy is an area we need to be focused on and try to make sure that it is a good place to be and good place to conduct business. our first panel is going to be the federal trade commission and the department of commerce. on the second panel, we will hear from consumer advocates,

technology specialists, members of the business community, their insights and experience are valuable and very much appreciated. i don't know if everyone knows the polling data, but recently, common sense media published results that said 85% of parents say they are more concerned about online privacy that they were five years ago, 75% of parents don't think social networking sites do a good job of protecting their children's online privacy, 91% of parents say that search engines of social networking web sites should not be able to share kids' physical location with companies until parents to opposition. -- parents give authorization. we will try to work through these issues as best we can. again, senator hutchison is on of the way, and we will

recognize her in a few moments for her opening statement. until she gets here, senator kerry, would you like to say a few words? >> first of all, thank you for holding this hearing with senator rockefeller, who wanted to be here but was unable to be. thank you for your leadership and storage on these issues. i must say, i was impressed by the energy -- we talk about a social network. there was a hell of a social network in here before the hearing started. [laughter] a lot of chatter. as we all know, there is no general law of congress to govern the surveillance.

that is why i intend with my other colleagues to propose one, a commercial privacy bill of rights. the purpose of the legislation, i want to emphasize, is not to discourage information sharing, but rather, to encourage it, but under a common code of conduct that respects the rights of both the people sharing the information and the legitimate organizations collecting and using it on unfair terms and conditions -- on fair terms and conditions. the folks we and working with, many here today in the industry know that throughout my tenure on this committee and now is chair of the communications subcommittee, i have worked hard to protect the innovation and open architecture of the net, i worked hard to fight for

neutrality, to prevent taxation, and other things. i believe that in this vital resource for our country in some ways -- but it is important to recognize that increasingly, the american people have concerns and express those concerns. every single app that anyone of us applies to our smartphone or that a child applies to it is an observational opportunity for our company. amazingly, internet users collectively sent 107 trillion e-mail's with a t -- messages in 2010. each of those messages is a scannable entity for key words that indicate the interests or patterns of the people who send them. facebook started 2010 with 350 million users, and ended with

more than 600 million. almost all of which are sharing information broadly, whether they realize it or not. the collection and use of information offline from grocery stores to hotels to airlines has also reached a record high, at enhancing the data at businesses collect online. on the positive side, all this information sharing is generating enormous economic activity, and we like that, we want that. it incurred as all kinds of innovation. we want that -- it into ridges all kinds of information. we want. but it also creates new opportunities for unethical collection of information. the question should ask, why should they? there is no law that requires that they do. that has generated a lot of anxiety among americans for protecting their identity,

protecting their personal information, protecting their habits, protecting the choices they make. people have asked, what's the problem that this legislation would seek to solve? under current law, there are companies to date engaged in the practice of harvesting information from web sites and elsewhere and using and selling the information without the consent and/or notification or knowledge of the people to whom that information pertains. there also companies engaged in the practice of using and collecting information that are not building privacy into the design of their services, and as a result, they the appropriate procedures and protections to ensure people's information is secure and being treated fairly.

once a person's information is collected, there are no legal restrictions on the further distribution other than those that the collector chooses to impose on himself. lastly, americans cannot today demand that someone who has collected the information stop using it. each of these activities is a problem that americans are asking us to address. i have long thought that baseline privacy protections, and in law were a matter of common sense. in the last few months, i've reached out to colleagues on both sides of the aisle, privacy experts at firms and academia, and to the advocacy community, with one a simple goal -- to figure out why we are not reach a consensus on the national standard for treatment of people's information, and what we can do to establish one. let me say thank you to many of the people today. there has been a very positive

reaction to this. a concerted effort by the obama administration, the commerce department, others working diligently to help mold this and shape it. i have been impressed by the cooperative atmosphere in which everybody's working. many of the companies that have rejected legislation in the past has made massive investments in privacy protection for their own customers and owned firms. a fair share of them have chief privacy officers who care deeply about the issue and have spent a lot of time thinking about it. these are serious people. many of them here, some of them will testify today. they believe that people's information is deserving of respect and protection, not just because it makes good business sense to protect your customers, but also because, i believe, and date think it is the right thing to do and keeping with the value

system and ethic that we share here in america about individuality and privacy. the entire goal of the drafting process we are using to write a commercial primacy bill of rights is to win pro-privacy, british innovation experts over to the side of its up -- pro- innovation experts over to the side of it, and code of conduct -- a common code of conduct. i believe we all benefit by. kanin these allies will depend on our willingness to -- gaining these allies will depend on our willingness to recognize that good can come from a proper collection of data, while allowing for experimentation and flexibility in the implication of privacy practices through the establishment of safe harbor -- the implementation of privacy practices through the establishment of safe harbor practices. i think people will acknowledge at the amount of reasonableness

and flexibility, but we cannot let the status quo stand. we cannot and the issue -- we cannot continue to allow collectors of the information dictate and we cannot let firms that provide it no protections provided misleading statements in some cases about protection that they can change at will, whim, fancy, or allow them to just send information to others without regard to where it goes or under what conditions that it goes there. mr. chairman, i hope we will establish clear and flexible rules for behavior in our legislation, and if not, i think everybody understands that enforcement agencies are going to step up and react against unfair and/or deceptive practices with cases that will

be billed -- built individually as you go along with less clear protection then we could do if we go about this in a sensible way. if we don't act, the world's largest markets will continue to impose on our innovators in their own rules for privacy protection, i believe those rules could wind up being less flexible and less innovative than what i will be proposing. i look forward to working with witnesses here today, i thank you very much mr. chairman, for allowing me to make a statement. >> thank you. senator isakson. >> i cannot help but think when i was listening to senator kerry speak that i ran a company for years and we worked through various mediums to sell the product. we would always take the media, whether it is tv or radio or display in a magazine, by trying to pick the medium that we

thought the most potential customers for our product would actually go to. that made me do a lot of thinking. what the internet has done and technology has done is allow that anonymous information that was subject to guesses to become a potential commodity that could be sold for purposes of that determination. i think it is a very proper time for the commerce committee to look at this, because of the expense of the internet, expense of the information, and what has taken place and the revelation that it has brought to the american market. i look forward to being part of the committee and working with senator kerry, senator pryor, but to fight the right message to send -- to find the right message to send and my way to go ahead. >> both of these witnesses have extraordinary bios and lists of accomplishments that we will

submit for the record, but what i would like to do is simply introduce them. jon liebowitz, chairman of the butterball trade commission, and the hon. lawrence strickling, assistant secretary at the department of commerce. >> thank you for your leadership on privacy issues, as well as giving me the opportunity to be strickling ofrry the department of commerce. our agencies have a long history of cooperation and we look for tickets and knowing that while ensuring that this is growth -- look forward to continuing that while insuring business growth continuation. just this week we announced our first major enforcement effort aimed at abusive behaviorial

marketing practices. we charged and online advertising network with violating the ftc act by offering the ability to opt out of targeted advertising, but without telling them that the- how -- and it the opt -- the opt-out vanished in 10 days. that is not only bomb, -- not only wrong, it is unacceptable. . this case -- it is the first of many more privacy cases, enforcement cases you will see from us, should send a strong signal to the online advertising industry that the ftc will not tolerate attempts to subvert consumer choice. which brought over 100 -- we have brought over 100 spam and

spyware cases over the past 10 years. very much like this committee, what i heard in your opening statements, recognizing the real benefits of information collection, but also that the status quo, as you said, senator wery, isn't acceptable, released a report in december designed to reduce burdens on businesses while insuring business innovation. it made three primary recommendations. first, meeting privacy -- baking privacy protections into the design. second, choices should be presented to consumers in a subway, at the time they are making decisions about the bid -- in a simple way, at a time they're making decisions about the data. third, privacy notices must be more clear and standardized.

otherwise, people will not read it. we receive 446 comments, may be a record for us, and we expect to issue a final report later this year. to further the idea of supplying addresses for consumers, the report recommended a "do not track" mechanism, which made similar to the -- may sound similar to the "do not call" mechanism. all this should have a choice about whether third parties, invisible to us, can tell us around the internet as we shop or search for information, a medical diagnosis. it goes back to your point about the deanonymization of information over the past 10 years when you think about the impact. "do not track" will consumers a

choice. it encourages business growth and innovation and. sticklers and -- stakeholders have responded very, very positively. microsoft and mozilla rolled out new mechanisms to allow consumers control. the industry is now demonstrating that "do not track" is feasible, so the discussion turns to which approach is best. one promising effort consists of marketing companies and associations known as the digital advertising alliance, which is designed an icon that they hope will be deployed industry-wide that will lead to more information and choices. for my part, i remain concerned that the current proposal won't result in permanent opt0o and does not allow -- a

permanent opt-out. alliance members want to go further, and my understanding is that there is an insurgent group that wants to prohibit all kinds of tracking. we are cautiously optimistic that the alliance is moving in the right direction. i ask for unanimous consent for an additional minute. >> sure. >> from my perspective, i am an agnostic as to whether the private sector does "do not track" for congress requires it, but we need to make sure it is not just an anti slocan but really works for the american people -- not just an empty slogan but really works with the american people. "do not track" should be in brussels that consumers do not have repeated to me to -- is this -- should be universal so

that comconsumers to not to decide on a company-by-company basis. "do not track" should not only allow consumers to opt out of advertising, but opt out of tracking altogether. from my perspective, i don't mind getting targeted ads, but people ought to be given a choice. finally, it to be effective and enforceable, without technical loopholes. we hope to continue to see the private sector develop tools and standards more broadly and hopefully, we hope to see consumer privacy by applying the consensus principles from our report, transparency, consumer choice, and working with this committee, department of commerce, we think we can make that happen. i thank you for this hearing. >> mr. strickling.

>> it is a pleasure to be here today to testify on behalf of the department of commerce to discuss the state of online consumer privacy. i welcomed the opportunity to discuss how we can better protect consumer data privacy in this rapidly evolves in internet economy, and in doing so, i am pleased to testify with chairman jon liebowitz of the federal trade commission. as the principal advisers to the president on communications policy, ntia has been hard at work the past two years with the department of commerce, and general counsel, and colleagues throughout the executive branch to provide a broad assessment of how our current policy framework for consumer data is serving consumers, businesses, and other participants in the internet economy. i would like to thank in particular the federal trade commission for its collaboration with us and its leadership over the years in addressing this important issue.

to guide the overall agenda, the internet policy task force, which includes issues in addition to privacy -- we have focused on the two key principles. the first is the idea of trust. it is imperative with the continued growth of the internet that we preserve the trust of all actors on the internet, and nowhere is this clearer than in the context of privacy. if users could not trust the their personal information is safe on the internet, they will be reluctant to adopt new services. our second principle is that we want to encourage stakeholders to address key internet issues. we want stakeholders to come together to address these issues in ways that domestic of flexibility and speed and efficiency that are lacking with traditional regulatory responses. these principles form the framework for addressing online privacy that the department proposed in its primacy green paper last december.

the key elements include the following -- first, we recommended the establishment of a fair information practices principles as the foundation for primacy in the internet economy. these principles will set a baseline of consistent, comprehensive protection. second, to promote flexibility and speed to address privacy issues as they arise, the green paper recommended that the department engage actively with industry and consumer groups to develop in forcible codes of conduct. third, consistent with the ftc's existing enforcement role, the green paper recommends strengthening authority to enforce these baseline privacy principles. we received roughly 100 comments on the green paper, and we are working hard to prepare a final document later this spring as a statement of administration policy in this area. as we have reviewed the comments

and continue our discussions, i can report today that the administration now recommends that congress enact legislation to provide a firm legal foundation supporting specific aspects of this new policy. we specifically recommended that any legislation to provide a stronger statutory framework to protect consumer privacy should contain the three key elements. first, it should create baseline consumer data privacy protections, a [inaudible] as senator kerry refer to it, a consumer bill of rights. we support a comprehensive set up bases of this law. it would provide a clear privacy protections for personal data in commercial contacts in which existing privacy laws do not apply or provide adequate protection. second, legislation should provide the ftc with authority to enforce baseline projections

, granting explicit authority to enforce primacy principles strengthening its role in protection and enforcement, resulting in better protection for consumers. third, legislation should create a framework that provides incentives for the development of enforceable codes of conduct as well as continued innovation around privacy protections. these codes can allow industry and government to adapt rapidly to a fast-evolving online marketplace. one incentive we urge congress to consider is to give the ftc the authority to offer a safe harbor for companies that implement code of conduct that are consistent with the baseline projections. this statutory framework is designed to be flexible, to keep requirements well tailored, and to provide a basis for greater interoperability with other countries promise the law -- privacy laws. i am confident that our ability

to provide consumers with meaningful privacy protections in the internet economy, backed by effective enforcement that can adapt to changes in technology, market conditions, and consumer expectations, establishing and maintaining this dynamic consumer it data privacy framework is not a one- shot game, and will require the ongoing engagement of all stakeholders. the department and administration are firmly committed to that engagement. with or without legislation, the department ntia will continue to make data privacy a top priority. we will encourage this tickled as how best to develop codes of conduct -- interest stakeholders as to how best developed with the conduct -- how best to develop codes of conduct. we will work with congress and other stakeholders to develop consensus on reforms to our consumer data privacy policy framework. i look forward to working with

this committee on the the important issue, starting with answer questions you have for me today. >> chairman liebowitz, let me start with you, if in. you mentioned a new icon advertisers are using. -10 is that just came on line in the last several weeks -- my impression is that that just came on line in the last several weeks. do you like what you see? >> we are encouraged by what we're seeing. the industry has been working, i think in good faith, on this icon notion the past two years. the pace of moving forward has become far more rapid since the summer hearings this committee held and that the energy and commerce committee held in the fall, and since we release our

report in december. it is promising -- we would like to see -- the majority of commissioners would like to see a "do not track" commission that includes a prohibition on attracting. -- tracking. there are a number of developments and the last few days. >> mr. strickling, i think i saw last night a story it that the white house is talking about the privacy bill of rights. do you anticipate they will come forward with a proposal for the bill, or is this more just in general concepts that we can expect to see from the white house? >> yes, sir. the green paper was put out in december, and we're currently working to develop a more complete and we hope will be an administration statement of

policy later this spring. what i testified to this one is that the administration is now at the point of recommending that this be dealt with in legislation. we will continue to flesh out the particulars as we complete the overall policy paper. we will work with members of this committee and congress on the specifics now. >> i have questions about "do not track," but i think of like to go to senator isakson, since the vote just started. >> mr. liebowitz, on page 2 of your prepared testimony, you out a number of cases over the last 10 years in various categories -- spam, a children's protection. is that a volume by category proportionate to the number of complaints you get, or is it just -- >> well, we keep a database, and that is an important way in

which we develop cases. there are other ways as well. it is not a perfect symmetry, but we would like to think it is in proportion. we are a very small agency so we tried to leverage our limited resources. we tried to go where the harm is or is going to be. we think it is reflective of the. i will give you consumer complaints, but as you know, sometimes you will see something you read about, or commissioner well, and that will go into the investigative process. >> that is exactly where i was going with my follow-up question. most federal enforcement agencies, the cases and they pursue in response to complaints from citizens. but you also monitor news media reports and then follow up based on whether it appears to fall

under your responsibility? >> sure, and we brought a very important antitrust case because senator klobuchar boarded up at a hearing a year ago, involving a drug for children with heart defects. we are a very bipartisan agency. commissioners have all sorts of ideas about what we should be doing, and it is channeled into our investigation and enforcement efforts. >> $21 million in civil penalties -- about $80 million in civil penalties you collect over the year. where does the money go? >> back into treasury, and often we try to get redress for consumers. one of the ways we try to obtain in the financial reform legislation it is the ability to get civil penalties for violation of our unfair or deceptive acts or practices authority.

it did not make it into the final legislation. it was something caspar weinberger supported when he was the ftc share in the 19 7/8. -- when he was the ftc share in the 1970's. >> probably the most effective way to protect the consumer would be to give them a mechanism to protect themselves. you talked about the icon where you can elect whether your information can be shared or not. we know that technologically, anything can be done now, but is that doable? >> yes, the only question is which way. >> senator kerry. >> chairman liebowitz, a lot has been discussed about the "do not track" proposal, and i want to hone in a little bit.

is it your judgment that if a company comes up with a strict policy, pro-privacy protections, etc., and opt-out, do you think then that "do not track" is still necessary? >> at this point we do, because individual companies have individual practices -- a commercial bill of rights here, which i think it's a great idea -- it may not mean that every company has that. what we are trying to do, like you, is develop baseline of privacy protection for consumers. from my perspective, "do not track" mechanism is easy to implement for consumers, could be an important choice mechanism for consumers, and an important way to protect privacy for consumers who want to limit tracking. >> so, in terms of the potential

harm or protection, depending on which way you look at it, that you are trying to ride the consumer -- to provide the consumer, if you have "do not track," it does not mean they will get no advertising, like "do not call" means you will not get any calls. it simply means you will not get customized advertising, but you'll still get bombarded by advertising. >> you will still get b -- you will still get advertising. >> so the analogy with "do not call" is not a prop -- not appropriate? >> yes. >> if you had a standard, you

had a code, offering of the traffic is per se bad? >> no, we don't think it is per se bad at all. we think most consumers won't mind being tracked. they get more personalized advertising. we just think consumers ought to have the ability to opt out of that kind of tracking. the analogy was sometimes used is if you are walking around a mall, someone should be tracke -- following you around if they don't know who you are and sending e-mail saying "that is jon liebowitz, he is interested in buying a jacket in the usual colors." you should of the right to not be followed around if you don't want to be followed around. firm has a strong

privacy policy, and you have another firm that does not, you will treat it with the same in the context of "do not track"? to having virtue a stronger policy and have been tracking take place in the context of this on the policy -- >> it would include privacy by design, readable privacy notices. there will be transparency and more choice. my sense is that the most responsible companies, my understanding, supported the "do not track" notion for third- party companies. i think there is an enormous of virtue or benefit to having a sort of baseline of privacy protection, negotiated industry codes. we are working with the commerce department on that. but we also think there is value in having the ability to opt out

of targeted advising or just sensitive information, like medical searches or financial information. >> with respect to "the wall street journal" series on what they know, i assume you followed that. what did you draw from that? >> general things and a specific things. generally, what came out of that -- this series of stories last summer, and at many follow-ups -- one is that some companies had a very good privacy practices, but many do not, and it resulted in an enormous amount of information being collected about consumers, and not on the sites they are on, but cookies, software embedded. it was a motivation to stepped- up enforcement efforts and write

privacy reports. specifically, we were having the debate on whether to propose the "do not track" mechanism. is it technologically feasible? one of the stories, as you know, is about microsoft developing this and the balancing act between the privacy advocates and engineers and marketers, and with the result it -- where they resulted. this sort of split the difference. microsoft, to its credit, stepped out and endorsed the concept since our report.

[laughter] >> thank you, mr. chairman. when you talk about privacy, it is the same category as apple pie in this country. we have a problem here, because what most americans don't understand, and unfortunately, members of congress don't understand, is that we have a lot of ties with the internet to behaviorial marketing. amazing amount of free information is immediately accessible because of behavioral marketing. it equals money. my first question is, does anybody know, do either you know, what the cost is going to be in terms of the economic vibrancy of the internet for some of the things that are being considered? isn't it fair to envision that

"do not track," in fairness, since the april marketing is money, that some of these companies are going to charge for that? >> for opting out of tracking? we've not seen that -- >> but we've not pass any laws yet. >> no, but to their credit, they are in the process of offering some sort of free opt-out. we think it should go further, but nobody has talked about monetizing that. if you put some limits on tracking or have a privacy protections, as the commerce department in vision and we support -- i am supportive of -- you don't necessarily need to -- the sky will fall down on internet commerce. if consumers have more trust in the internet, they will do more business on the internet, to. >> do you think there is a

vision of where we draw the line? we would never dream of telling slim-fast they cannot advertise on "oprah." behaviorial marketing. a lot of women watch that show and their marketing is mostly to women. how do we draw the line between what kind of a behavioral marketing is fair and what kind invade privacy? >> you raised an important point, and i don't know if you were here when senator isakson was speaking. he used to run a company, and he pointed out that there's a difference between advertising and internet -- from the corrugated, enormous amounts of information -- aggregated, and on amounts of information. it is different, as you know, from advertising on tv. we want to ensure privacy protections for consumers, and i

assume that you do. >> i would add to comments that the chairman has meant that in our discussions, we find a strong level support among industry to create the baseline projections. the baseline, though -- it is fair to call it a bill of rights. what we have in mind is not unlike the bill of rights, a concise statement, and the industry working with consumer groups and experts in the field that come up with these codes of conduct to provide more specificity. we think in that regard that we don't have to see the government drawing some of these very difficult lines and imposing them as regulation as long as we are providing adequate oversight of this process by which industry working with all stakeholders develop appropriate codes. we think we can get to a regime that will greatly improve privacy consumers and still meet

the needs of businesses while we continued to see the growth of the internet. >> you are right, i don't think most american consumers understand weather information is going, how it is monotype and where it is traded, but at another bedrock level, they get the issue of internet privacy. there was a poll that found that 80 percent said -- 80% of americans want some sort of "do not track" options. the greater concern that parents had over their kids and internet privacy and safety. at some level, americans understand -- >> i agree, i don't mean it to cut you off. i just think we ought to be careful about the unintended consequences. we know the good guys will try to do this right.

we know the bad guys -- it will be hard to regulate them in a way that makes sense. with all due respect, if we think we're doing a really good job in consumer oversight of commerce in this country right now, you know, i mean, don't get me started on the ads i see on cable tv that i need to just think that we have got to go very carefully, make sure we think about the unintended consequences, and most importantly, think about the bad guys that are not going to pay any attention to your code of conduct. consumers are going to continue to not have confidence in the internet as long as the bad guys are out there. we have to be careful not to go too fast too far without not thinking what killed me -- without going too far down the line.

>> the proposals we have made have entered your concerns. it would have legislation that would create a base line of these fares information practice principles. those are some of the thing that the chairman mentioned earlier, transparency and disclosure, what level of consent. i am confident, if in doing so, the congress also gives the ftc the enforcement authority to enforce that. they will be able to go after the bad guys based on that baseline. but what the baseline allows is the flexibility to the good guys, as you call them, to craft specific protection they need to have to run their businesses. >> i agree. i have the feeling, mr. leibovitz, that your budget will not grow enormously over the next decade. you have plenty of work to do over there. frankly, a lot of work that needs to be done that you cannot do now. if we are going to add to your workload and have the same time

do something that will minimize the amazing things we have done on the internet, we have to make sure america buys into that agreement. >> let me interrupt here for a second tier this vote is going to close. we need to run over there to vote. what i will do is recess this for a few moments, do these two books, and then we will reconvene in a few minutes.

>> reconvene the hearing. i want to thank everyone for being patient with us to vote. my understanding is we have a few senators on the way back over. i know senator " carr wanted to ask questions of the first panel. >> thank you for holding this hearing. thank you to our two premises, as well as the second panel. thank you, chairman leibowitz, chairman strickling. it is great to be here with you on this important topic. i wanted to focus on web sites with teenagers and children. maybe because i walk into my daughter's room and she was led casting with her friend. luckily, they were working on their homework. the interview she was doing with senator mark caskey, i am sure will be devastating to her.

i wanted to ask you a few questions about this. a few -- a recent "wall street journal" article examined 50 websites popular with teenagers, looking at tracking tools installed on a computer. they found over 4000 pieces of tracking technology. that is 30% more than were found in a similar analysis of adult web sites, which is rather disturbing. i think there were more being used on children websites. can you describe your agency's experience in dealing with tracking of children, and teenagers online, and what needs to be done here? >> there is no doubt, there is an extraordinary amount of monetizing teenager information. you know from your daughter -- who i believe is pretty responsible -- and my own children, they spend a lot of time on-line.

one of the recommendations in our report discusses the need for a kind of enhanced consent for children. we are taking comments on that. of course, one of the other issues with teenagers is, often, they act impulsively, they put things on line that they never expect will remain there, when a privacy policy of a network switches from something that protect privacy to something that has less privacy protections, sometimes kids do not realize that a lot of information that they thought was private will be put online. it is an important issue for us. we are studying it. >> anything you would like to add, administrator? >> no. >> as we talk about privacy, i wonder if the ftc had looked into piracy notifications on smartphones?

you can imagine they are harder to read and smaller letters, but they access the same type of information and have the same type of privacy concerns that other larger computer screens do. >> one of our recommendations -- i believe in the report, we looked at mobile phones. we have done a number of hearings on mobile issues. you are right, in terms of privacy policies, they are much harder to read, in terms of applications for children. you talk about a specific application, and we were glad to see that the alleged malefactors had improved their standards. these are all very important issues, and particularly in the mobile space, we are going to see, by encouraging more consumer choice and transparency, and really, if you do not have so few people, so few children understand service,

if you do not have easy to understand terms of service by children or parents, you have a lot of information that is taken from kids. information that is placed on line that perhaps parents would not want their kids to do, and kids and teenagers may know what to do themselves. >> what i would like to say in response to both of the examples you have given is, it is impossible for us to predict today what the privacy issue is going to be six months from now. that is why, from the free- market ministration is proposing for legislation, to use codes of conduct that will be prepared by this multi-state told a group of industries is important. it gives you the speed and flexibility to respond to these types of issues when they arise. if we are chasing after these issues and trying to write regulations in a more formal way that perhaps take a year to write, we cannot stay up on the

issues raised. overall, again, this is further demonstration of the need to full multidustry -- stakeholder process to work on these codes of conduct. to deal with these issues as they arise. that is what the ftc is doing on an individual basis, assembling the parties to get them to talk about these issues, nudging them in the right direction. >> but i think that is the name of the book. it looks like you want to add something. i wanted to follow up. one of the problems is, even under the best circumstances, it takes a long time for us to get these lots done. if we did get these voluntary codes of conduct that would respect the development of technology and also not interfere with the development of technology, it would be key, as long as we get these voluntary codes of conduct.

>> we have multiple investigations going on of inadequate notice to mobile and to kids. apparently, in one of the investigation we are doing, the privacy notice on mobile was 152? away. -- clicks away. >> so if they wanted to find a privacy notice, they had to click 152 times? thank you for clarifying that for the record. thank you to both of you and i appreciate the way this is moving. >> thank you both for joining us today. there are several senators we either had to come and go, expressed an interest in being here, probably will leave the record open for a couple of weeks to allow senators to ask questions. we would appreciate a quick

response. thank you for being here today. i will introduce the second panel. we will go ahead and bring up the second panel. staff, as always, will do a quick switch and bring the second panel forward with their name tags. as they are doing this, what i will do, i will introduce the members of the second panel. once they are situated, i will call on them, as we go down the row. first is eric anderson, vice president, deputy general counsel of microsoft. second is john montgomery, chief operating officer interaction. third is researcher and consultant. fourth is barbara lawler, chief

privacy officer for intuit. the fifth, last but not least, chris calabrise. legislative counsel for the american civil liberties union. as we are getting set up here, water is being poured, charts are being established, in at one moment, we will go ahead and call upon mr. anderson mr. anderson, go ahead. >> thank you, mr. chairman. members of the committee, my name is eric anderson. i and the deputy general counsel of the microsoft windows division. thank you for inviting me to testify about the state of online privacy. we applaud the leadership the committee has shown on this issue. i want to also endorse this as a secretary strickling's call to

privacy legislation. legislation can be an important component to a multi-pronged approach to privacy, but also technology tools, industry initiatives, and consumer education. at microsoft, consumer trust is vital to our business and privacy is a critical component to maintain the trust. all of our service offerings, we strive to be transparent about our privacy practices, offer meaningful privacy choices, and attack the security of the data we store. in my role for the win the division, i work with our soccer team to develop privacy sought for enhancing features for internet explorer. we have groups working on similar efforts to rot microsoft, including for our search engine, gaming platform, and advertising services. the different ways we engage with consumers gives us a unique perspective on the privacy discussion. in light of our experience, we believe a combination of technology tools, industry initiatives, consumer education and legislation is needed to protect privacy and promote

innovation. let me briefly explain the importance of technology. at microsoft, we have implemented privacy by design. we engineer privacy and our products and services from the outset and consider privacy from the product life cycle. one example of where we put this principle into practice is the privacy features we have developed for internet explorer. most recent versions of internet explorer ,ie9, was released this week and offers a groundbreaking new tool called tracking protection. this do not track feature allows consumers to decide which side can receive their did and what content from sites they view as engaged in tracking, providing consumers with greater control over there on my experiences. we are proud that internet explorer was the first major browser to respond to the ftc's call for a do not track mechanism. we look forward to working with all stakeholders to provide a meaningful tool for businesses

and consumers alike. industry can be affected in complimenting technology tools. for instance, we have part and with the network advertising initiative to develop principles governing online behavioral advertising. we're continuing to collaborate with members of the vigil advertising alliance and others in the advertising industry to implement guidelines and best practices to help ensure the consumer cosunderstands and can easily opt out of consumer advertising. third element of a comprehensive approach to advertising is education. we agree with the ftc and consumer commerce department that consumers need a better understanding of practices. that is why we provide a clear understanding of our own practices and offer choices about what they will be collected and what will be used. we have also parted with consumer advocates and government agencies to develop educational materials on a consumer privacy and insecurity. the last critical element is federal privacy legislation. legislation is needed because

the current sectorial approach to promise a regulation is confusing to consumers and is costing for businesses. we believe what inflation should establish a common set of privacy and security requirements that are not specific to any one technology, industry, or business model. for particular industries or business models, industry initiatives should coexist with, or should build on top of this line obligations of the law. on an advertising is a for example. bayside federal privacy requirements around user notice, control, and security, can government industry initiatives and innovative technology tools. in conclusion, microsoft is committed to working with you to protect consumer privacy in a way that compliments technical and industry-based measures and promotes commit -- continued innovation. thank you for giving us the opportunity to testify. i look forward to answering any questions you may have. >> thank you. mr. montgomery.

>> senator pryor, members of the committee, good morning and thank you for the opportunity to testify. i am the chief operating officer of the north american division of group m operators. we are a full-service media operations employing over 17,000 employees in 81 countries. our clients are some of the biggest brand advertisers in the world. we advise on where to place advertisements most effectively. i believe the committee's examination to begin with the benefits added by on an advertising. the internet has revolutionized our allies in extraordinary ways. advertising is the fuel for the internet's economic engine. behavioral advertising is an essential practice that delivers advertising based on consumer preference or interests, conferred on by data from on activity. effectiveness suggest that a user has a new baby, we can show ads for new baby products. consumers find such

advertisement more relevant than read the messages and advertisers are more likely to attract consumers interested in their products and services. we and our plan strongly believe in protecting consumer privacy. it is not only the right thing to do, but it is good for business. i'm excited to share with the committee or the we have done to make sure consumers of both transparency and control to access the provinces in terms of behavior. groups that participated in an unprecedented industry leading association that represents a response to the ftc report that calls for self regulation or on monday april advertising. this effort is being spearheaded by the leading association that collectively represent the key elements of the international ecosystem, more than 5000 companies in the world. the ftc report that at a road map of key elements should be included in regulation including regulation, transparency, consumer control, and data security. a major component of the program is the use of an icon that informs consumers that

information is being gathered. we looked at our team to invest the same design and marketing research in this icon as we would use for our fortune 500 clients. let me briefly show you how the prince will work from the consumer's perspective. if i could refer you to the board on my right. it is a simple and effective one-stop platform for consumers to have their information collected and used for behavioral advertising purposes. consumers can opt out with the click of one bun with respect to all participating companies. hundreds of companies are working to advance compliance of the program. two other elements of our implementation efforts are education and enforcement. groupm has partnered with the advertising bureau on a campaign to inform consumers on how they can manage your online experience and explain how advertising supports the internet. to date, more than 600 million impressions are being delivered

as part of the campaign. finally, i want to emphasize companies will be held accountable for complying with the principles, just as the ftc recommended. all of us in advertising have a strong incentive to maintain and accountability in order to gain consumer trust. principals are forcible programs administered by the direct marketing association and council of better business bureaus. these organizations have long standing and respected compliance program that they are leveraging to cover the principles. and the company that claims to comply but failed to do so could face the ftc enforcement or deceptive acts or practices. well our progress has been exciting, work continues. one of the major benefits of some regulation is the ability to respond quickly to changes in technology and business practices. for example, recently, policy- makers raised concern that advertising purposes could be used as a use -- as a method to deliver eligibility decisions.

these are hypothetical concern that do not reflect actual business practices. nevertheless, industry is stepping forth to address these concerns and we are expanding our guidelines to clarify and ensure such practices are prohibited and one never occur. the suffering of the principles 0 much of the digestive federal policy makers, which has strengthened our independent commission to consumer privacy and the ford taurus. as you proceed in this dialogue, it is important to avoid mixed messages to consumers that could inhibit them from exercising the choice to the self regulatory tool available. we have to ensure there is a single standard to make it simple for consumers. we do not want to add confusion to an already complex arena. i want to make it clear, we are working with browser companies such as microsoft and fire fox, and even chrome, who are part of the coalition to incorporate self regulation and do not track together. in conclusion, we believe the program creates the right framework that encourages both innovation and privacy, bring

the benefits of online services and privacy protection to consumers. thank you, and i look forward to questions. >> thank you. mr. soltani? >> thank you for the opportunity to testify about online consumer privacy and the state of tracking. i am a technology researcher and consultant specializing in privacy and security on the internet. i served as a technologist on the division of the the detection of the federal trade commission. i was also the proper title consultant on the "wall street journal) within a series. my opinions here are my own and do not reflect that of my employers. in my testimony, i will talk about the pervasiveness of online tracking, discuss the extent to which consumers can control tracking, and will conclude with a description of the proposed do not track mechanism spirit the practice for using third-party services is common on the web today.

in 2009, i colon vendor study where we found an average of 12 third party trackers on the top 100 most visited websites. one site use roughly 100 different trackers. that means when a visit -- user this is the website, 100 unseen entities aren't notified about the visit. this raises privacy concerns because third-party entities can volunteer users behavior across multiple, on related websites. one advertising study can track a user to's web browsing activity to support spending 9% of the website examined. this company is not alone in its reach. [unintelligible] across several million websites. these companies are repositioned to infer a great deal more than just the user's interest. this unique vantage point allow them to collect the vast majority of the use a web browser activity. it is important to point out online tracking is not limited to desktop computers.

mobile devices and smartphones raised in the privacy concerns because people always have them on their persons. application services running on this device may have the ability to access precise location information, providing third part is with intimate details about a user's habits. every major web browser includes a patchwork of privacy and enhance the technology is not enabled by default and often off it difficult to compare. worse, when properly configured, online trucking companies have designed ways to circumvent their function. as a result, rather vendors and consumers are losing the game of privacy welcome all. many and services seemed to temper this service by offering users a way to opt out of the liberal advertising. however, is typically only a light to opt out of targeted ads, not the underlying tracking facility. i do not think this is what consumers would expect. not all companies engage in all one tracking offer an opt out.

only about a quarter of the online trackers i am aware of have existing opt out mechanisms. today's consumers choice mechanism fails to provide fails -- consumers with meaningful control. advocates and industry have been working to establish an easy-to- use tool to control online tracking, commonly referred to as do not track. two separate but complementary approaches have advanced, and while i will not discuss them and technical details, i am having to answer any questions you have about them to conclude, the online tracking is pervasive on the internet and is an issue that is often difficult for users to understand. even when they realize they're being tracked, there is little that can be done. consumedly more transparency into who is tracking them on line, what information is being collected, and how the information is being collected, used, shared, and sold. there is a clear need for better promise to control to prevent unwanted tracking, and industry has not delivered. to be effective, privacy protections on line will likely require technology and policy

working in tandem. thank you for inviting me today and i hope that my testimony is helpful. i am grateful that the committee has invited a technologist to talk but these issues because these issues can be deeply technological in issue. i hope to at help understand these nuances to help online tracking a complex but important issue. >> thanks. who's next? >> good morning. thank you to the members of the committee for the opportunity to comment on the state of online privacy. my name is barbara lawler. i ask that my full statement be put into the record do to time constraints. >> without objection. >> our mission is to improve people's financial lives so profoundly they cannot imagine going back to the old way of doing things. it is true, this mission that we approached the to current privacy debate. we are a neat corp. adhering to various regulatory data privacy

regimes in the u.s., including financial and health-care privacy, and privacy of tax return information. additionally, we took over 50 million people to our products. these people entrust us with our -- their most sensitive data, their federal and state income tax return information, individual purchase transactions, bill payments, and health information. their business accounts, including increased employee payroll, accounts receivable, then a list, inventory, and other business data. as more technology solution to the clown, customers place more trust in us as we and other sensitive data. at into it, we develop data stewardship principle that express how we think about how we use develop and offer guard as to guide our judgment. the central concept of data storage chip is simple. it is our customer's data, not ours. we are, and will be held accountable, for the information entrusted to us. as you think about privacy

legislation, we encourage you to think about four things. one, a principal-based approach. two, focus on customers. 3, data-driven information, and four, global unanimity. we see the value in principle- based legislation. because be adhered to various privacy regimes, this idea could work in tandem with self- regulatory approaches, codes of conduct, and best practices. our principal based approach it is not prescriptive, but enables flexibility to offer data-driven solutions within existing sector specific privacy laws. our principles-based approach could fill the gap that exists between defense sector approaches, while at the same time, blending with them. it is all more likely -- also more likely to recede by businesses of all sizes. it is also more likely to be more honest and by the public it takes to protect, and our principal-based approach is more likely to achieve consensus over time in the international context, which will be essential

to global competitiveness in the emerging digital economy. such an approach could set forth a minimum set of requirements for business and provide a fundamental core level of consistency for businesses and consumers. codes of conduct based on context, industry sector, technology platform, and other data you strivers, would build on top of privacy baseline. codes of conduct can serve as the remark and support for " regulatory safe harbor programs. second, any regula -- -- must be focus on the customer. customers at a part of everything we do. what we learn through extensive customer research is that it is not about what we think it's bad for business, or what we think should be done. it's about keeping what is important to the customer at the heart of the principles. third, responsible data use can foster innovation. consumers' expectations have changed as people are increasingly conducting their lives online. volume and complexity of data in

this new connected will presents down as opportunities to unlock a tremendous amount of data to create better experiences and products for customers. driven's approach to data- innovation is to responsible use and entrusted to us by our customers, to improve their financial lives, and the products and services we provide them. last but not least, legislation must take into account the need for uniformity among various privacy remains. in developing privacy principles, that is to be a uniform approach. while some new laws and regulations are based on essentially the same principles, multi-state and multinational companies are challenged by the differences among them. the essence of data storage chip cannot rely on just one element of our principles. it must rely -- comprised of all of them combined. uniform principle this legislation, customer-driven innovations coupled with responsible, innovative, and compelling data uses. they keep for givingintuit the

ability to express their thoughts on the subject we would look for to working with you as you about which privacy legislation and to answer any questions you might have. >> thank you. >> thank you, chairman carry. members of the committee. thank you for the opportunity to testify on behalf of the american civil liberties union. we support comprehensive protection for americans' personal information, including a do not track mechanism. one of a do not track mechanism. one of the new models of advertising is to target ads at the specific individual to make as more relevant. the result is a system where americans are routinely tracked as they surf the internet. americans assume there is no central record of what they do and where they go on line, but in many instances, it's no longer the case. behavioral marketers and several works are creating profiles of unprecedented depth and breadth

that reveal a personal aspects of our lives, including religious and political beliefs, medical records, and reading habits. these can be shared with anyone, including offline employers and the government. this is neither deny nor anonymous. it identifies our sexual health, sexual orientation, or issues with weight. they may indicate vulnerabilities. a 92-year-old veteran was bilked out of $92,000 who identified him from marketing lists. a recent high-school graduate had been identified by advertisers as concerned about her weight. every time i go on the internet, she says, she sees weight loss adds. and so conscious about my weight, i tried to think about it in the ads start me thinking about it. information i can be used for identity theft is on line, but

beyond our control. one company asked the company to search information on her. armed only with her name and e- mail address, she said within 30 minutes, the company had my social security number. in two hours, they were live, my weight and health status. nor are surfing habits anonymous. many companies now directly link your name and mailing address to your surfing habit. companies know who you are online. all of this information is available for sale with no controls. of particular concern to the aclu is government access. many civil liberties access on the internet, the ability to read provocative materials, associate with non-mainstream groups, her voice dissenting opinions, are based on the assumption of practical anonymity and government scrutiny. these assumptions are rapidly eroding.

law-enforcement routinely purchases access to offline private databases full of detailed data bases on each of us. they can legally do the same with on-line information. in fact, online and offline database as of personal information are increasingly linked. but we have no right to access those same databases or control how they are used. solutions exist. that technology may be new, but the problems -- problems are not. congress and the states have passed many laws to protect americans reading habits and viewing habits in the offline world. the department of health education and welfare crafted basically privacy principles. they have become the basis for a comprehensive privacy laws in many industrialized nations as well as sector-specific clause in the the united states. the department of commerce recently called for adoption of these principles for the internet. we endorse the use of fair information practices as well.

in addition, the private sector is developing solutions like to do not track mechanism. these mechanisms need to be backed by the force of law. we reject any approach that relies solely on self-regulation by companies. self-regulation by itself is a failed approach. it has allowed the current data practices to flourish. consumers want change. surveys show 67% reject the idea that advertisers should be able to match ads based on specific websites consumers business -- consumers visit. 61% believe these practices were not justified even if they kept costs down and allow consumers to keep websites free. if this collection is allowed to continue unchecked, capitalism could build what the government never could -- a complete surveillance state online. without government intervention, we may soon find the internet has been transformed from a

library and playground to a fish bowl in that we have unwittingly see a core values of privacy and autonomy. thank you. >> that is a pretty far reach. it is a big concept -- and not suggesting you are reaching, it's a big statement on the potential downside. you, us and that's it. that's all that's left. sorry. i want to probe a few things but then we will get you all out of here before too long, if i can. you have drawn this potential danger picture which is appropriate to put in front of us. what's the appropriate response to that in your judgment?

>> we can begin with the do not track mechanism. if backed by law, that gives people the opportunity to opt out of this state. it is not enough on its own. the principles you have described, the ability to give consumers control over their information is vital to this as well. do not track is a part of that. it is also about sharing information collected by first party. just because i want a company to collect my information doesn't mean i want to -- quantities of for everything. >> is there a balance in your judgment between the obviously very important interests your highlighting and also the commercial economic interests we have in maintaining the viability of a growing enterprise? >> there absolutely is a balance. my fear, candidly, is that right

now, there's no legal protection and there's a great deal of incentive. americans are some of the greatest businessmen and businesswomen in the world. if you give them an economic incentive and say there's an economic incentive to track people on-line, they will do a good job of it. we need to put controls in place to make sure the consumers part of that process. >> how far do those controls have to go? one of the problems is we have learned -- i don't think i do have the statistics here. we have found historically that people consistently say this is something i'm super concerned about, but then they tend to

engage in practices on the internet that bhilai that a little bit. >> part of that is they have not had a meaningful choice. it has been a take-it-or-leave- it approach. it's hard for people to -- >> all lot of people at table would disagree they don't have a meaningful choice. >> the fact that i cannot point to a law that says i control my personal information makes the hard for me to tell a consumer they do have that control. accompanies the promises are important, but not enough. >> does anyone want to speak to that? >> microsoft is obviously involved in online advertising and provides the tools to consumers to help them protect themselves from the activities they may view as tracking.

we are in the somewhat unique position of having to make sure we are on both sides of the equation. we did provide some statistics about the incredible growth of online advertising. it really is feeling a lot of the content available on the internet today and it's important to make sure that is kept in mind. at the same time, consumer trust is incredibly important to our company and users want to be in control of the data in how that data is used and we want to make sure they have the tools available to make sure they are in control. >> what does that mean? >> i will give you an example from internet explorer. we have a feature we have introduced within explore that

from the menu available on the product, you can select a feature called -- do you selected every time it comes up? >> that is a good question. when you have installed the product, there are many items available to you to choose from. >> i know sometimes when you download something, you get a whole menu of information. you can miss them sometimes -- how does it show up? >> it would not be part of the process. you would not be asked to choose among the different settings. after you install the product, he would choose from the menu --

>> do you have to choose the menu -- it would not like privacy warning or you have to sign up and say i agree to proceed forward? >> that is correct. >> a lot of people say that's not really a choice. >> we understand that perspective, obviously. >> unsure when you really want to get someone's attention, you guys know how to do it. >> we have been pretty successful at doing that. >> does this rise to that level or does it not? >> that's a good question. what we have found is people want to experience the full internet when they use a browser product and they want to receive the personalization they are able to get when they use the

full internet. there are people who want to have a choice and have tools that are easy to access -- >> as you said, you know how to get people's attention. things keep popping up and you have to figure out how to get them away. then there are things that do not popup and you cannot find or there are harder to find. that is at the center of this to some degree. there has to be some sense of fair play and transparency and accountability. >> that the big part of the discussion -- at what point should you be affirmatively giving users a choice to make a decision. >> maybe, mr. montgomery, this

is in your area -- before i ask the question, let me come back to into it -- into into it -- the principles you apply are admirable and terrific. you talk about income tax health and all of these things you manage. differentthat a very kind of relationship and businesses -- and business than some other businesses which therefore make it easier for you to frame this as we are going to protect you. a lot of other people may not have that kind of stake. people can come and go as long as the traffic is sufficient and they're able to attract enough of what they're doing.

there may be a commodity value to the information they have that is sufficient to encourage them that there may be better economics on that side of the ledger which encourages them to chase that information rather than be as protected as you are. does that make sense? >> yes. customer trust is very critical to us. you talk about the nature of the sensitive information we have and the relationship we have with our customer is they use our services to manage their businesses online, so we have actually gone directly to our customers and ask them what's important to them. understanding while there is that sensitive information, there is other aspects of their information that might not be treated in the same, more

sophisticated way. >> might you agree if you go to a retail outlet, they have a different interest? are there different states as a result? with the be a different value level of protection as a result of the difference in the activity? >> this is why we are talking about a principle-based approach. clearly our data is more sensitive and maybe somewhat less of, but one of the things that was clear from our customers, whether it is more shopping-related data or related to personal finance, while they may not read privacy policies, they really care about how their data is used and want to understand that through clear and open relations. the more clear you are, the last

one to be fed with choices. what mattered was something very contextual which related to their experience. we think about that and eight principals-based approach and we would think about something that works in our environment but could also be adapted to different businesses and industries. >> i certainly have enormous respect for the concept you have articulated. putting that kind of statement out front is a high standard and we have to figure out where that applies. mr. montgomery, you may have a different feeling about that. >> not a different feeling at all. an important question you asked earlier which was about very clear notice that information is being collected so nothing is

hidden under a menu. i think the self regulation program of which microsoft is an important part has an icon on every single advertisement -- the billions of advertisements that go out and collect information will have an icon on them which will allow consumers to click on the icon and tell them who is collecting information. >> what is the chart underneath it? >> is an example that running at the moment. it is a pervasive at choices icon consumers would click on and they will be told about behavioral advertising and be able to opt out. >> does verizon get a piece of the action today?

>> no, they do not. it is an important point that you raise and it needs to be out there. we think this will become like the recycling of logo and build consumer trust tree >> how does that find its way there now? -- build consumer trust. >> we are running out the program to our client base. there are more than 100 major clients to subscribe and clients simply have to give us permission to go ahead and most of our clients agree with it. there is an underpinning technology that allows us to figure out who is tracking so we can apply at a compliance mechanism to the process. if an advertiser does not comply, we contact them and called out publicly. ultimately, that information is made public. >> i presume a consumer

awareness about that -- with the be a campaign to make people aware? how would you get the word out, so to speak? >> that's a great question. in my testimony, i talked about a campaign we developed with the internet advertising bureau called privacy matters. that has enjoyed over 600 million impressions against consumers and we're going to extend that campaign so we can teach consumers about what information is collected, the importance of behavior all advertising, and having access to free content on the edge that which is fueled by advertising. >> the do you accept the notion -- i think it is a terrific step forward and i congratulate you for it, but do you believe you need a base line law where there is a safe harbor where we have prescriptive regulation? >> what we feel is very

important is self regulation is given an opportunity to work in this process. if it needs to work with a baseline law, we're happy to cooperate with you in any way to refine and insure compliance as long as self regulation can operate. >> if the ftc were to certify a program like that and it is compliant with the fair treatment of people's information, given the way the networks and the modern technology available and the low cost of collection and so forth, couldn't collectors of the information outside of your program wind up doing a lot of damage in ways that would be inconsistent with what you have

said consumers ought to have? >> you mean it data trackers who are outside the program? >> precisely. >> i think there are bad actors out there. we would absolutely support in any way we could, to uncover those bad actors and doing anything to harm consumers. >> since our approach is principles-based, does that give you the latitude within which to be able to move? >> i think what is important is we have over 5000 companies right now subscribing to the self regulatory approaches. in that way, we have 5000 policemen out there watching for the bad actors. interestingly, last week, we discovered some fraudulent practice on the internet and handed it over to the fbi for

further investigation. we hear this all the time amongst our member base where they are looking out for that all the time. we would certainly work with you in any way we could to ensure consumer privacy and continued innovation. >> we have shared with you and the company, the current drafts and as with several of you, and i wonder if you might share with us your sense of where we are in that process now? >> from our perspective, the process is going very well. we appreciate the opportunity to be involved in the the process. we see the drafting process going in the direction we hope for, which is to establish baseline principles we think are reasonable and the industry can and should be able to sign up

for. we're very encouraged by it. >> we also like the direction the proposal is going. we are generally supportive. we like the principals-based approach and the consideration around codes of conduct and safe harbor. we look forward to working with you on refining the proposal as it moves along. >> is there a major hurdle in your judgment? >> i would say there aren't any major hurdles. where we would like to work with you would be on the level of prescriptive best around notice and contracting. >> we look forward to working that through with you and -- >> there is very much we do like in the bill. we think there is a lot there to

work with. in particular, we talked a lot today about concerned about bad actors. you have companies representing in this room that are high achievers as a very high standards. i think what a principal-based approach that is outlined in the proposal will help us do is to aid that the large mass of businesses and organizations in the middle that may not have the of resources or expertise in privacy issues that you see at this table. a principles-based approach, using safe harbors as described in the proposals are a positive mechanism to bring the large masses and to a high level of privacy protection. >> i have just been noticed that they need me back in the office. i have to run and do that in a moment. i think carl gaddafi it does not

deal -- i think colonel gaddafi does not believe in privacy. u.s. talk thoughtfully about the first party and the and the website you are directly interacting with and third-party is some entity the first party allows to interact with you. it makes sense. we get it. but we have been struggling a little bit with the cases where you have a first party such as facebook and facebook tracks behavior at another site, etc.. given that the consumer had a first party relationship with facebook, as long as notice and choice was provided for facebook to acquire the information, is

that a point somewhere between the first and third party? we've been struggling with this all day. >> that's a great question trade facebook is a first party and a third party. when you enter facebook into your browser, that's a first party and direction. contacts on washington post where there are facebook widgets and objects, and that context, it constitutes a third party which it. the loading of a third-party widget that resulted in passive data collection would still fall under third-party data collection. it is poll nuanced in that you're just going to interact with that which it. where users knowingly interacted with --

>> where would the notice have to be? when you first sign up that this can happen toward as notice have to occur each time? >> since these things are often not -- are often tied to identifiers in the first party context, the notice could happen at which point the cookie could be added to tie it to a third party context. we want to be careful around forced third-party interactions so that when you go to a website and a video starts playing coronet pops up that you are forced to dismiss, you can force them to require to act, you want to frame that around meaningful interactions with third-party objects that consumers are aware of. we might consider that ok. all other passive data collection we would consider third-party data collection. >> we have to work that through

obviously but some of this does get into nuanced area and gets tricky. i think the principle we want to have died s is to do no harm -- to have died us is to do no harm. we are going to balance that carefully and we will continue thoughtful process of engagement. i want to thank -- slight nepotism here going on, but my brother at the commerce department as general counsel has been involved in this without my instruction or engagement at all. they have done this on their own, but i thank them for their input which has been helpful in

this process. obviously we need to work with the administration to figure out where we're going. i hope we can get a product for everyone is standing up and saying this is good. this is something we can live with and something we can work with and at the consumer is given a set of choices and opportunities that they do not have today to make an intelligence-guided the selection as to where they're headed and what's happening to their information. i think we can come out of there without upsetting the obvious commercial interests we all want to encourage and that are important to us. on that note, we will adjourn here today and look forward to trying to get this thing into shape where we can get introduced. i'm working very closely with senator mccain and he has some interest in this as we go. i hope we will get to a point

where we can introduce is in short order. i think we need to do it. i think we need to do it soon. i think everyone can benefit from this and i look forward to getting this accomplished. thank you very much for being here today. we stand adjourned. .

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next up, we are going to take you live to ottawa, the canadian house of commons. there minister of finance will present the canadian federal budget for fiscal year 2012. just getting under way, live here on c-span. >> after 20 years of sitting in the opposition, she has not delivered anything, nor has her party. we have settled the fiscal imbalance. we have done more this afternoon, our minister will have some excellent news for

quebec, and i hope that she will stand up for quebec to ensure that the economy will continue to prosper and jobs will continue to be created, mr. speaker. i was surprised to hear my colleague comment and many people in this house respect him. he had a principle, and it was representation by population. one-person, one-vote. so my question for our colleague is, is she a democrat? is it normal in this house for each parliamentarian to represent the people based on population? >> i would say that this bill would be good for quebec and would even enable quebec to win additional seats if there were

elections. there will be support to the budget that will be brought down, which will contain good things for quebec. >> instead of standing in the house to support the minister of finance, he should stand up and support the people that worked in the shipyards. [cheers and applause] >> order, please. [cheers and applause] >> the honorable member can continue with questions and comments.

but now, i must interrupt. the member will have two minutes and 30 seconds remaining. it being 4:00 p.m., the house will now proceed to the consideration of ways and means motion number 11 concerning the budget presentation. >> consideration of ways and means motion number 11. >> second in. moves of this house approves in general the budgetary policy of the government. debate. the honorable minister of finance. [cheers and applause] [chanting speech]

>> mr. speaker, today our government prisons to canadians the next age of canada's economic action plan, a low tax plan for jobs and growth. [applause] since 2006, our government has worked hard to deliver real benefits to canadians, real support for the challenges of the real world. we cut the gst twice, from 7% to 6% to 5%. [applause] we introduced the $1,200 per year universal child care benefit. we established the tax savings account. we removed more than 1 million low-income canadians from the tax rolls. the list goes on. we delivered these benefits to

support the financial security of canadian families while protecting health care and pensions. in good times and challenging circumstances, our government has made responsible choices. when times were good, we take down debt. we strengthen our already strong financial sector. we delivered more than 120 tax cuts for canadian workers, families, and jobs-creating not trooper infopreneurs'. we also rejected calls from the opposition to a poll the job- killing carbon tax. -- to uphold the job-killing carbon tax. [cheers and applause] most importantly, when the global recession hit, canada was able to meet the challenge head- on and through canada's economic action plan, we delivered further tax cuts to help stimulate our economy. >> mr. speaker, we enhanced

unemployment benefits and expanded retraining for those hit hardest by the global recession. we also made historic investments in roads, bridges, public transit, and fire education. creating jobs across the country and building the foundation for long-term growth. >> canada is emerging from the global recession as one of the world's top-performing advanced economies. [applause] throughout the recession, the world has looked too can add that as a model and an inspiration, but still, there is more to be done. the global economy is still fragile. the u.s. and other trading

partners are facing challenges. compared to other countries, canada's economy is performing very well. but our continued recovery is by no means assured. many threats remain. >> in this time of global uncertainty, our government is focused on the number one priority of canadians. we're focused on securing our economic recovery. we are focused on improving the financial security of canadian workers, seniors, and families. we have a plan to achieve these goals, a plan that is working, and we need to stay on track. >> speaker, the next phase of canada's economic action plan is critically important. to secure our recovery from the global recession, canada needs a principled stable government. [cheers and applause]

now is not the time for instability. it would make it harder for canadian businesses to plan and to expand. it would drive investment away to other countries. it would jeopardize the gains we have made. our government will provide a steady hand needed to secure our recovery and strengthen the financial security of canadians. we have a balanced plan to achieve these goals, a low tax plan for jobs and growth. mr. speaker, the parliament faces a choice. it is a choice between stability and uncertainty. it is a choice between principle and opportunism. our government is focused on securing our recovery from the global recession. we will keep taxes low. we will undertake additional

targets that investments to support jobs and growth. we will control government spending and stay on track to eliminate the deficit. [cheers and applause] we will not cut transfer payments for crucial services -- [cheers and applause] in education. we will not cut those transfers for health care, like the previous government did. [applause] and we will not give in to opposition demands to impose massive tax increases. [cheers and applause] this is a reckless policy that would lead to a continuing deficits and higher taxes for all canadians. it would stall our recovery, kill hundreds of thousands of jobs, and said families back.

mr. speaker, the steamroll comes from the private sector. >> we will help businesses to create jobs. we will not raise taxes on growth. this is a key principle moving forward in the next phase of canada's economic action plan. i encourage all the honorable members of this house to examine in detail the comprehensive plan we are presenting today. for now, i will mention just a few highlights. >> first, a low tax plan to create jobs. since july 2009, the canadian economy has created more than 480,000 new jobs. [cheers and applause]

still, we remain concerned about the number of canadians looking for work. we need to keep predicting in creating jobs now. we need to keep building the foundation for long-term growth. a key part of that foundation is low taxes. our government has delivered tax relief for all canadians. through our cuts togst and personal income tax, the average canadian family of four is saving more than $3,000. [applause] our tax cuts are also helping employers to invest, grow, and create jobs. our commitments to lower taxes is supported by its strong consensus that protecting canada's tax advantages key to securing our recovery. it is key to creating jobs now and to ensuring long-term

growth. that means greater job security for workers and greater financial security for their families. our government will preserve this advantage for canada. we will keep taxes low to keep creating jobs for canadians. [applause] mr. speaker, i even so, in the current global economic climate, many businesses remain hesitant to invest and hire. now it is time for the private sector to invest again. our government will take further action to encourage them to expand and create jobs. to encourage small business to hire new employees, we will provide a new targeted incentives. the hiring credit for small business will provide a one-year ei rate for some 525,000

canadian small businesses. [applause] this measure will reduce payroll costs for new jobs and encourage hiring. mr. speaker, we will also take further action to help the manufacturing and processing sector to encourage investment and job creation. we will extend the 50% straight line accelerated capital cost allowance for manufacturing -- [cheers and applause] [inaudible] this will help businesses and headquarters to invest and improve productivity and stay competitive. it will benefit a broad range of industries, including paul and paper, primary manufacturing, computers and electronics, and the automotive industry. phew >> mr. speaker, to support

the canadian forestry industry, we will extend the current forest innovation and market development programs. [applause] in addition, through a consultative process involving the aerospace industry's association of can and and and their member firms, we will conduct a comprehensive review of policies and programs to develop a federal policy framework to maximize the competitiveness of canada's aerospace and space industry. [applause] mr. speaker, beyond this, we will promote new export opportunities for all canadian businesses. canada is one of the world's

great trading nations. we need to keep expanding our access to foreign markets, to create new jobs here at home. our government has signed a trade agreements with eight countries, and we have launched negotiations with some 50 other countries, including india and the european union. [cheers and applause] to support these expanding trade relationships, we will modernize canada's customs tariff legislation. this will cut red tape, make it easier for canadian businesses to compete internationally. also, we will extend export development canada's tiberi powers to support canadian businesses in the domestic financing market for an additional year. [applause] we will also enhance canada's engagement with india through stronger bilateral ties along --

among business people, public servants, researchers, and academic institutions. in the next phase of canada's economic action plan, our government will also take further action to support families and communities to build a higher quality of life for all canadians. we will provide greater financial security for canadians and practical help to help make ends meet. mr. speaker, canadians were card looking after their families and contributing to their communities. -- canadians work hard. many individuals and families and added responsibilities in caring for ill parents are relatives. these family caregivers make special sacrifices, often leaving the work force temporarily and for going employment income.

one may be caring for her mother, just as her mother once cared for her. another maybe at home full-time to look after her young son, who has a disabling illness. another may be helping his wife as she faces the challenges of ms. each family caregiver is unique, but all of them are generous canadians. they are our neighbors, our friends, our family, and that they deserved some extra help. to recognize and support canadians caring for in firm to loved ones, we will establish a new family caregiver tax credit. [applause]

this new tax credit will be on an amount of $2,000 and will benefit more than 500,000 canadians caring for loved ones. it will include, for the first time, those caring for sick spouses, common law partners, and miners in children. who had a disabling childress -- and minors for children who had a disabling illness. >> for so many canadian children, involvement in the arts is a part of growing up. whether it is dance, music lessons, or camp, it is a great way to make friends and develop creativity. but for some families, the fees and costs involved in be beyond their reach. to help parents in providing

these important opportunities for their children, we will establish a new children's art tax credit, covering up the $500 per child -- [cheers and applause] mr. speaker, in an addition, we will further help families make their homes more energy efficient by extending for one year the eco energy retrofit homes program. [applause] this will help families lower their energy bills and support jobs and home renovation. mr. speaker, we will also take action to help low-income seniors. in communities across our country, there are seniors struggling to pay their bills each month. often, their women.

often, their widowed. they worked hard their whole lives for their families and communities but lag any pension incomes. to provide greater support to seniors most in need, we will provide a top-of benefit to the guaranteed income supplement. -- a top-up benefit to the guaranteed income supplement. [cheers and applause] this new measure will provide up to $600 extra per year for single seniors, and up to $840 per year for senior couples. [applause] mr. speaker, it will improve the financial security of some 680,000 canadians who helped build our country to help them live their senior years in

dignity. mr. speaker, our government will also provide an additional help to canadians saving for retirement, including self- employed canadians, through a new low-cost pension option. we will work with our provincial and territorial partners to implement the registered pension plan as soon as possible. federal provincial and territorial governments are continuing work on options for a modest enhancement to the canada pension plan. any changes to the ccp will require a consensus among government and reflect the need to protect canada's economic recovery. >> as i mentioned earlier,

through canada's economic action plan, we have implemented the largest federal investment in infrastructure in over 60 years. [applause] going forward, we will work with the provinces, the territories, the federation of canadian municipalities, and other stakeholders to develop a new long-term plan for public infrastructure. we will also introduce legislation to confirm permanent funding for municipal infrastructure through the gas tax fund. [applause] >> here here. [applause] >> this will ensure a stable and predictable source of revenue for the renewal of local infrastructure to improve the quality of life in our cities

and towns. mr. speaker, our government will also take action to strengthen rural and remote communities. the number of doctors and nurses in canada has increased in a six years, but canadians in some regions of the country continue to experience a shortage. we will help address this problem by for giving a portion of federal student loans for new doctors, nurses, and nurse practitioners to agree to practice in underserved, rural, or remote areas. [applause] mr. speaker, we will provide $52 million over the next two years to support programs for aboriginal communities across the country, including those in the territories. these investments could support

to assist first nations to upgrade and replace their essentials fuel tanks on reserves. [applause] mr. speaker, we will also take action to support volunteer firefighting services in rural communities. [cheers and applause] >> here here here here. here here. [applause] >> volunteer firefighters sacrifice their time and some encourage fences to provide a crucial service. as we were reminded just days ago by the tragic fire in ontario, they are also willing to sacrifice their lives to protect others.

[applause] we will recognize the importance of this noble necessary work and helps sustain volunteer fire departments by establishing a new volunteer firefighters tax credit. [applause] mr. speaker, in addition to these concrete measures to strengthen communities, our government will keep investing in the knowledge and skills canadians need to prosper over the long term in the global economy. since 2006, we have made major investments in research and development, in post secondary education, and skills training. as noted in the recent issue of the chronicle of higher education, canada is increasingly attracting top talent from all are around the world. canada has gone from a brain

drain to bring gain, -- to brain gain, and the world is taking notice. [applause] mr. speaker, in reporting research and development, our goal is to promote innovation. and ultimately, to create good new jobs for canadians. in the next phase of canada's economic action plan, we will build on our successful investments so far. we will establish additional can add that excellence research shares. we will invest in a world class research through support for the perimeter institute, brain canada, and -- [speaks french]

we will extend and vince research funding to students and researchers that canada's colleges and pauly techniques. we will establish 30 industrial research chairs that colleges and schools across canada. we will also provide new support for joint commercialization projects between colleges, universities, and companies. [applause] alongside our investments in research and development and in higher education, our government has also made substantial investments in it skills training. our goal is to help canadian workers reach the next stage of their career and to seek new

opportunities in the years to come. >> to koster competitiveness in the digital economy, we will encourage colleges to work with small businesses to accelerate the adoption of information and communication technologies. we will promote student enrollment in both the secondary science, technology, engineering, and mathematics programs. we will also provide tax relief for canadians who are required to certify their skills in carpentry, medicine, and other fields by making their exam fee is eligible for the tuition tax credit. [applause] mr. speaker, to respond to increased demand for help in career transition through post secondary education, we will enhance the canada student loans program for part-time students. [applause]

to help older workers who may need special help to re-enter the workforce, we will extend the target initiative for older workers. mr. speaker, over the past two years, work-sharing has protected almost 280,000 jobs. our government will continue helping businesses to retain employees and keep canadians working. to continue protecting canadian johns, we will enhance and extend the work-sharing program. -- to continue protecting canadian jobs, we will enhance the program. we will also take further action to support the outstanding canadians who have served our country in uniform. we will build on our continuing substantial support for career transition services and serve veterans affairs canada. in addition, our support for additionhelmets to heart hats

program will help find work in construction. [applause] our great canadian veterans have earned our deepest gratitude at highest respect. this is just one more practical way to provide the support they deserve. mr. speaker, the next phase of canada's economic action plan is designed to build on our actions so far. it is our plan to create jobs now and sustain economic growth for years to come. looking ahead, can add the's leading private sector economists project steady growth over the next few years. still, the plan our government is presenting today is based on a cautious estimate of canada's economic growth in the near

term. it reflects our government's consistent responsible, and balanced approach to the economy. mr. speaker, a key part of that balanced approach is our commitment to sound fiscal policy. among other things, a sound fiscal policy requires that we protect the integrity of the tax system. as promised in the speech from the throne last year, we will keep taxes low, while taking action to close unfair tax loopholes that allow a few businesses and individuals to take advantage of the canadians who pay their fair share. >beyond this and most of all, sound fiscal policy requires that we return to a balanced budget.

can add up's deficit is much smaller than that of most other advanced countries. we are emerging from the global recession with the lowest net to gdp ratio of any g-7 economy by far. [applause] even so, we must not be complacent. we must ensure that canada remains financially sound. then we can continue building a future of hope and opportunity for all canadians. the global recession required extraordinary investments to protect canadians, to stimulate dowry economy come and to create jobs. canadians understand that a temporary deficit was necessary to limit the impact of the global recession in canada, and all parties in parliament agreed. going forward, to secure our

recovery, we must now focus increasingly on controlling government spending. we must complete the transition from providing temporary stimulus to ensuring long-term economic growth. to that end, we will continue implementing our plan to eliminate the deficit in return to a balanced budget by 2015. [cheers and applause] >> hree here here here. >> first of all, we will complete our stimulus package as promised. secondly, we will continue specific measures to restrain the growth of government program spending. third, we will complete, within the next year, a comprehensive review of government spending. this strategic and operating

review is designed to realize substantial additional savings through greater efficiency and effectiveness. it will place us in a strong position to resume paying down government debt and to continue investing in priorities and supporting canadian families. >> mr. speaker, our government has laid out the next phase of canada's economic action plan. a low tax plan for jobs and growth. it is based on our extensive consultations with canadians from coast to coast to coast. it reflects their values and response to their priorities. our plan does not say yes to every demand. it does not contain massive new spending.

because that is not leadership. >> leadership is about finding a balance between the needs. it is about staying focused on our number one priority, security and our economic recovery by creating jobs and growth now and in the years to come. we believe that the honorable members of the opposition will recognize that our plan addresses practical concerns with responsible solutions. as i said earlier, today, parliament faces a choice. a choice between opportunism or working together to secure our recovery and strengthen the financial security of canadians. our government is focused on providing the principle that a stable government our country needs at this challenging but promising time in our history. we will keep taxes low and

preserve can add that's advantage in the global economy to keep creating jobs for canadians. we will strengthen the financial security of canadian workers, seniors, and families. by implementing the next phase of canada's economic action plan, we could keep building a higher quality of life for our families and communities. by choosing to act in the best interest of our country, we can ensure a bright future for our children and grandchildren. we invite all honorable members to support our low tax plan is for jobs and growth. [cheers and applause] [applause]

[cheers and applause] >> questions and comments? [applause] >> we believe this now. tomorrow, we will be back to the canadian house of commons, as prime minister stephen harper answers questions. he is the leader of the conservative party and is under

pressure to present a budget that opposition parties will accept. they need at least one of the three opposition parties to support a budget or a vote of no-confidence will force his government to dissolve parliament and call for elections but you can see the canadian house of commons question time tomorrow at 2:15 eastern on c-span2. ahead of that, more international programming with british prime minister david cameron. he will be answering questions tomorrow morning from parliament in london. that gets underway at 8:00. under he is done, the chancellor will present the british budget report could about the those beginning at 8:00 tomorrow from london, and that is also on c- span2. this evening on c-span at 8:00 p.m. eastern, abc world news anchor diane sawyer on the future of journalism. she will be talking with marrison about the future of journalism, speaking at the national press club. we will have the beginning tonight at 8:00 p.m. on c-span.

>> tonight on c-span2, a discussion on the history of senate rules and procedures. you will hear from a former senate majority leader, as senate historian, and the wall street journal capitol hill reporter. there will but that efforts to change the filibuster and a secret calls, as well as reminiscent of proceedings in the senate. >> and i kept trying to figure out what the rules are here. is that robert's rules? they did not make any sense. i went to the parliamentarian that the senate in said, i do not get it. what the rules in the senate? and he said, there are only two release. he said, exhaustion and unanimous consent. and if you get the center exhausted enough, they will unanimously agree to anything. i said, i have got it. >> watch the panel on senate reform tonight at 8:00 p.m. eastern on c-span2.

>> the commander of u.s. naval forces in europe and africa told reporters today that u.s. forces had rescued one crewmember of the fighter that crashed in libya. the other crew member was rescued by libyans and turned over by u.s. forces. the admiral also discusses the status of u.s. military strikes against moammar gaddafi's forces in libya. he spoke with reporters by telephone from the mediterranean. this is from today at the pentagon. >> we're being joined by phone from the command ship under way in the mad at her -- mediterranean. he consumed demand -- command on october 6, 2010. he is also the commander of

joint task force odyssey dawn, the task force established to provide operational and technical international response to the unrest in libya, and to enforce u.n. security council resolution 1973 to protect the libyan people. again, he is joining us from his ship in the mediterranean, so this will be an audio-only feet from the ship. with that, admiral, i will turn it over to you. >> thank you. before i give you an overview of operation odyssey don, let me take a moment to address the u.s. aircraft that went down, which has been in the news in the last hours. late last night, central european time, two u.s. air force crew members ejected from their f-15 strike eagle after an

equipment malfunction in eastern libya. both crew members ejected and their safety crew member was recovered by coalition forces. the other crew member was recovered by the people of libya. he was treated with dignity and respect and is now in the care of the united states. the f-15 was assigned to conduct a strike mission against the about the regime's missile capabilities. they flew with the provisions of the u.n. security council resolution 1973. all the military operations are inherently dangerous, and your second in a press by the barrett -- bravery and courage of the young women and -- the young men and women. let me address operations and their then security council resolution 1973. international forces have been authorized to use all necessary measures to protect civilians that are under the threat of attack from forces loyal to libyan leader moammar gaddafi.

yesterday, you heard from the commander of u.s. africa command, the latin commander responsible for this operation. he briefed on how coalition forces are working together to encourage gaddafi to end the hostilities. today, i would like to discuss what joint task force odyssey don has achieved to date and how these operations have affected the firemen. first, let me talk about the countries that have come together to defend it the libyan people. with me, i have coalition representation from the french navy and the u.k. navy. i had the eyes and rolled from the french navy in the adderall from the u.k. navy. we're working closely with coalition partners. other 13 nations that are either here or moving forces in this direction. together, we have formed partnerships to support

international responses to this crisis. today, our coalition has multiple ships and submarines, highlighted by the french aircraft carrier, charles de gaulle, which i had the opportunity to visit yesterday. today, the aircraft carrier garibaldi, and the amphibious assault ship. their land and sea based aviation assets to include reconnaissance, early warning, attack, fighter aircraft, and support aircraft that are airborne daily in increasing numbers to enforce the no-fly zone. here at mount whitney, i am company and by liaison officers, and we are coordinating closely as we conduct the operation. let me briefly recap what we have done to date. on march 18, the coalition forces began a graduated sequenced campaign against the

government of libya to establish a no-fly zone to protect innocent civilians. following initial operations in benghazi by our french partners, u.s. cruise missile attacks the company by coalition air strikes rendered gaddafi's long-range air defenses and his air force largely ineffective. thus, enabling the coalition to establish a no-fly zone and opening the door for international and non- governmental organization humanitarian assistance efforts. we continue to expand the effectiveness of our coalition no-fly zone and other coalition capabilities. it is my judgment that despite our successes to date, gaddafi and his forces are not yet in compliance with the u.n. security council resolution, due to the continued aggressive actions his forces are taking against the civilian population of libya. i will not take your questions. >> i am from ap.

i have a question about the limitations of the mission as it has been described by president obama and others, particularly how it applies in places where reports on the ground say that conditions for civilians are growing increasingly tired. the libyan forces are in the city and fighting is going on there. how can you protect civilians in a situation like that and distinguish between rebels and civilians and government forces? >> that is a great question. as we put together our operational plans, first of all, the section of civilians and civilian infrastructure are our number one priority. we work very carefully -- fortunately, the coalition brings together a wide array of capabilities that have allowed us to minimize collateral

damage when we had to take connecticut operations. in the case -- in this case, i will not about the operation concert, but we are aware of the difficulties. we are aware of what we believe the intelligence situation in the city is, and we will, under the security council resolution mandate that we have, we will continue to operations that we believe will be ultimately a effective in ensuring that state described by the security council and the leadership of our individual countries of the coalition. >> are you saying that air power alone will effectively protect civilians in that kind of a situation? >> i think your question was,

will air power alone effectively protect civilians in that situation? at this point in time, the security council resolution has given us a mission to use the no-fly zone, using those powers that are specified in the security council resolution, expanding those. i am not going to comment on future operations and what future operational designs might be. right now, we had the no-fly zone, and that is our primary goal. >> david martin would cbs. there is a british report that during the rescue of one of rescuef-15 pilots -- the rescue of one of the pilots, there was

opened fire on villagers, and five villagers were actually killed. i would like to ask you with that report is true. also, yesterday, general hamm made a point of saying that there was no official communication with the rebel forces during this operation. were there any communications with the rebel forces in the course of recovering either of these two air man? >> let me answer your second question first. i had no communications with anybody from the rebel force in this coalition during recovery operations. the first question was about, was there any collateral damage during the recovery operations? recovery operations, any time we

have an aircraft malfunction and we lose that aircraft, there will be a complete investigation conducted. i am not prepared to talk about what that investigation mayor may not reveal. i will say that the recovery mission, from my perspective, was executed as i would have expected it to be given the circumstances. >> you cannot even say if you opened fire? >> what i am going to say is that we are doing an investigation. we are only hours away from having that incident occurred. we're in the middle of a major operation out here. this investigation will take time, and it will be looked at very carefully, i am sure, as we go forward. i have got ongoing operations throughout this campaign, so we are going to focus on those from

my office. >> when do you anticipate handing over command of this operation to the allies? is it possible that you would assume command under nato offices? second, there are reports that gaddafi tried to put a flight into the sky, and that was shot down. you have anything about that? >> first, let me talk about the transition of the coalition to another command-and-control structure. that also is something i am not focusing on how here. we have got a pretty busy plate. that is something for our political leadership to decide. what i can assure you is that the coalition will be prepared to transition it to whatever control our relationship is decided by the leadership of the nations involved, and we will ensure that there will not

be a break in the coverage or a break in the capabilities that we provide to enforce the security council resolution. i have no knowledge of the second question about gaddafi's jet you're talking about. it has been our stated policy that gaddafi, nor his family, have been targeted in this case. i am not focusing on the whereabouts are the actions of colonel gaddafi. i am focusing on the protection of civilians in libya. >> based on what you know now, how soon would you be ready to hand over command to one of the european allies? we have been hearing days. are you still on course for that? >> like i said, the structure will have to be decided by the leadership, the political

leadership of the nation's, and that has that happened to my knowledge. the actual turnover of the operation, this is -- military's do this all the time. we transition between organizational construct. it is not difficult for us. we have similar procedures that we operate together. we exercise together. we speak a similar language. we have similar procedures. and that part, i do not think anyone should be too concerned about once the political leadership decides how they would like to manage it. >> hello, i am with the l.a. times. what is your understanding of this situation on the ground? are you aware of forces loyal to colonel gaddafi carrying out attacks on civilians? you carrying out

tactical strikes in an effort to prevent that? >> first, my intelligence tells me that there are gaddafi forces in misurata and they are conducting a cat -- attacks against civilians. in violation of the security council resolution constructs. i will talk about future operations, but i am aware of it, and we are considering all options. as we look across the entire country, this country is just about the size of alaska. the forces of gaddafi are a fairly significant land force, and there in various locations around the country. we're dealing with it. the no-fly zone is in place. the no-fly zone is effective. we have diminished his ability from an air force perspective to the port -- to the point where i

am comfortable with the no-fly zone. we will continue to pursue all actions necessary to make them comply with this security council resolution. >> as of now, there have not been tactical air strikes in misurata? i am not asking about future operations. i am asking about past operations. >> there have been tactical operations, airstrike operations throughout the coastal areas of military targets throughout libya. >> i am from nbc news. there are reports that gaddafi forces have dug into this city, and that armed rebel forces are attacking the gaddafi forces and being repelled by their overwhelming air power. at the same time, we were told that jets dropped bombs on it

could not be military positions in and around the city. isn't that is essentially the u.s. coalition forces providing air cover for the rebels? and are there specific orders for understanding, or whatever you would call it, the coalition forces will in no way prevent rebels from carrying out armed attacks on get off the forces? >> that is a great question. i view it this way, i think our president was pretty clear when he laid out the construct in his speech on march 18 of what his expectations were. one of those is that the regime forces of gaddafi have to stop advancing on benghazi. they have to pull back from zalea. and these other areas including misurata. they have not done that.

in benghazi, we basically have forced him out. the other three places, they have not complied with directions from our president. so i look at how my mission here -- i replied that type of standard to operations that are occurring. if colonel gaddafi would meet that requirement and have a ceasefire implemented and stop all attacks against citizens and withdraw from the places that we told him to withdraw from, establish water, electricity, and gas supplies to all areas, and allow humanitarian assistance, then the fighting would stop. >> i am with bloomberg news. can you give the public a sense of the isr aircraft flying over

libya right now to enforce the no-fly zone? some specific examples, like global hawk. then i had a second question follow up. >> again, i am not going to lay down our forces at it -- our forces as they go across the country. we have moved mission isr assets into the theater that include some of the ones you mentioned as we prepare the environment to ensure that we can properly enforce a no-fly zone, the conditions mandated by his security around sold -- security council resolution 1970. >> to what extent are allied attacks being focused on the 32nd and ninth special brigades of colonel gaddafi? his best conventional units, apparently. what is your assessment right now on whetherhe